By Chris Villani

Law360 (August 28, 2020, 4:37 PM EDT) -- Uber Technologies Inc. on Thursday asked the Ninth Circuit to uphold a federal judge's ruling that allows the ride-hailing giant to continue classifying a group of Massachusetts drivers as independent contractors instead of employees eligible for sick pay, despite the coronavirus pandemic.

Firing the latest salvo in an ongoing, bicoastal battle over how transportation network companies classify their drivers, Uber pushed back against an argument that the public is also placed at risk when drivers aren't able to earn sick pay during the ongoing COVID-19 crisis.

Uber argued in its appellate brief that, at best, a small number of drivers might see "negligible" benefits from reclassification and are already entitled to far more beneficial federal relief aid that was passed during the crisis.

"In fact, the undisputed evidence demonstrates that the preliminary injunction sought by plaintiffs will make virtually all putative class members worse off," the brief argues, referring to the drivers' attempt to have a court stop Uber from treating them as contractors.

A survey of Bay State drivers that was submitted to the district court sought to determine whether they would benefit more from the Families First Coronavirus Response Act as opposed to Massachusetts employment law, Uber said.

"The results were staggering: 'Approximately 99% of such drivers … would likely receive more under Families First than under Massachusetts law,'" the brief argues.

The filing comes just days after a California appeals court stayed an order that would have forced Uber and Lyft to reclassify their drivers as employees. Before it was stayed, the ruling led to the companies threatening to leave the Golden State.

In the Ninth Circuit, the drivers are looking to undo U.S. District Judge Edward Chen's May 14 decision denying their emergency motion for a preliminary injunction that would have immediately forced Uber to reclassify its drivers as employees and grant them paid sick leave. The lawsuit was originally filed in Massachusetts and transferred to the Northern District of California in late March.

Judge Chen also said Uber could push the claims into arbitration. While the California Supreme Court decision in McGill v. Citibank NA in 2017 held that arbitration agreements that entirely waive the right to pursue public injunctive relief are not enforceable, the rule does not exist in Massachusetts, the judge found.

An attorney for the drivers, Shannon Liss-Riordan of Lichten & Liss-Riordan PC, has asked federal courts on both coasts to certify to the Massachusetts Supreme Judicial Court the question of whether Massachusetts would follow California in that rule.

Public officials in both Massachusetts and California, including both states' attorneys general, have also sued the ride-hailing companies over their classification of drivers as independent contractors. Massachusetts Attorney General Maura Healey has backed the drivers' stance that Bay State law would recognize a similar rule regarding public injunctive relief as the one in California.

In their pitch to the Ninth Circuit in July, the drivers said they feel pressured to continue working and risking exposure to COVID-19 "because of their financial precarity and lack of paid sick leave."

"COVID-19 has toppled Uber's house of cards and revealed the undeniable damage done by Uber's degradation of labor standards, which impacts not only the drivers but the public at large as well, particularly given that Uber's denial of state-mandated sick pay (based upon their misclassification as independent contractors) is contributing to the spread of COVID-19 by compromising drivers' ability to stay home if they are feeling sick," the drivers argued in their brief. "Uber's misclassification of its drivers can and should be enjoined now."

Uber countered on Friday by arguing that Massachusetts' sick time law would not help the drivers very much. Based on a sample of Massachusetts drivers, "'only 27.9% of these drivers drove enough to accumulate eight or more hours of sick leave,' while only '17.3% drove enough to accumulate 16 or more hours, 10.9% drove enough to accumulate 24 hours, and 3.9% drove enough to accumulate 40 hours,'" Uber said in its brief.

"In other words, even if plaintiffs succeeded on their claim for prospective injunctive relief, they would begin to accrue paid sick leave only now, and they could not use that leave until three months from now," Uber argued.

Liss-Riordan said Friday the argument that the federal benefits would exceed state benefits for drivers isn't relevant because the federal relief has expired. She said "it doesn't make sense" to argue that the company should not follow state laws just because the federal government stepped in to help during a crisis.

"Uber made this argument that not that many drivers would be eligible for sick time, but there are thousands of drivers," Liss-Rordan told Law360 in an interview Friday.

"So even if the number is a small percentage of drivers, that's still a lot of people," she said. "Given that we are still in the throes of this pandemic, any help that allows workers to stay home and not be out there contracting or risking transmitting the virus is important for public health and public policy."

An Uber representative did not immediately respond to a request for comment.

The drivers are represented by Shannon Liss-Riordan and Anne R. Kramer of Lichten & Liss-Riordan PC.

Uber is represented by Theane Evangelis, Joshua S. Lipshutz, Heather Richardson, Blaine Evanson and Brandon Stoker of Gibson Dunn & Crutcher LLP.

The appellate case is Capriole et al. v. Uber Technologies Inc. et al., case number 20-16030, in the U.S. Court of Appeals for the Ninth Circuit.

--Additional reporting by Hannah Albarazi, Brian Dowling, Linda Chiem and Vin Gurrieri. Editing by Amy Rowe.

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