Munger, Tolles & Olson/photo by Jason Doiy/ALM
Citing results from last week's election, lawyers for Uber and Lyft on Monday asked a state appellate court to reconsider and rescind its affirmation of a preliminary injunction forcing the ride-hailing companies to treat its drivers as employees.
Proposition 22, leading with 58.5% of the vote in current ballot counts, "moots the trial court's preliminary injunction and removes the legal basis for the Court's opinion in this matter," attorneys for Lyft argued in a petition to the First District Court of Appeal. Prop 22 exempts app-based ride-hailing and delivery drivers from California's employee-friendly worker-classification law.
The First District on Oct. 22 upheld the injunction issued by a San Francisco Superior Court on Aug. 10, finding that Uber and Lyft should have been prepared to adopt a new business model—one that does not rely on independent contractors—after the Legislature codified much of the California Supreme Court's 2018 opinion in Dynamex Operations West v. Superior Court.
The appeals court decision will become final later this month; a temporary stay on the injunction remains in effect. The state's election count does not have to be certified until Dec. 11.
"This court should not permit the opinion to become final when the underlying dispute—which centers on prospective injunctive relief—will become moot before jurisdiction has even been returned to the trial court. Instead, the court should grant rehearing and, upon Prop. 22 becoming law, reverse or vacate the injunction," Munger, Tolles & Olson partner Rohit Singla wrote in the petition.
Gibson, Dunn & Crutcher's Theodore Boutrous Jr. Credit: Diego Radzinschi/ALM
Gibson, Dunn & Crutcher partner Theodore Boutrous Jr. signed a petition containing similar arguments for Uber.
A representative for the Attorney General's Office said only that lawyers there were reviewing the filings.
John Coté, communications director for the San Francisco City Attorney's Office—another agency that pursued the injunction—said Uber and Lyft can't change the fact that they have been violating the law for years.
"Drivers and the public deserve restitution and penalties for Uber and Lyft's misconduct," Coté said. "We are going to continue with our case until justice is served."
Voter approval of Prop 22 has raised questions about the future of pending worker-classification lawsuits targeting gig-economy companies. Plaintiffs lawyer Shannon Liss-Riordan said last week that she expects those complaints will now shift focus to seeking damages until the time the new law takes effect.
California's Supreme Court is also weighing the question of whether the "ABC test" it set out in Dynamex for determining employee status is retroactive.
The author of legislation that placed much of the Dynamex opinion into state law said she's already considering other labor-friendly measures.
"Fighting corporate greed & unlimited spending is never easy, but we do it. Over & over & over again," Assemblywoman Lorena Gonzalez, D-San Diego, wrote in a Nov. 3 tweet. "And, don't worry, I got some ideas."
Editors Note: The classification between employee and independent contractor can have a huge impact on insurers, who will be asked to either provide insurance coverage for independent contractors on top of their personal auto policies, or provide health insurance and other insurance coverage to Uber and Lyft for their employees.
Mike Scarcella
Mike Scarcella is a senior editor in Washington on ALM Media's regulatory desk. Contact him at [email protected]. On Twitter: @MikeScarcella. Mike works on a slate of newsletters: Supreme Court Brief | Higher Law | Compliance Hot Spots | Labor of Law.