Lyft Says COVID Paid Sick Leave Suit Belongs In Arbitration

By Rachel O'Brien
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Law360 (June 17, 2020, 6:43 PM EDT) -- Lyft told a D.C. federal court on Tuesday that a proposed class action seeking paid sick leave for drivers with the ride-hailing service belongs in arbitration because the drivers agreed to an arbitration clause in their terms.

The company asked U.S. District Judge Ketanji Brown Jackson to order arbitration in the suit, which alleges that by withholding paid sick leave from drivers during the coronavirus pandemic, the company is forcing them to either risk their health and the health of their passengers or risk their livelihoods.

In its motion, Lyft said its agreement clearly requires arbitration to settle disputes and doesn't allow its drivers to submit claims through class actions.

"Because plaintiff and Lyft entered into a contract with an arbitration clause, this case must be stayed and plaintiff's claims compelled to individual arbitration," the company said.

Former Lyft driver Cassandra Osvatics filed a complaint in May saying D.C.'s 2008 Accrued Safe and Sick Leave Act requires Lyft to provide paid sick leave to its drivers, an important measure amid the COVID-19 pandemic.

Osvatics drove for Lyft from about November 2015 to June 2018, accepting the platform's terms almost two years after she had stopped driving using the Lyft app, according to the motion.

Lyft said Osvatics agreed to resolve any disputes with the company in arbitration when she signed up for Lyft's service in 2015, first accepting the terms on Oct. 4, 2015, then again on Oct. 30, 2016; May 4, 2018; and May 4, 2020.

The Federal Arbitration Act "requires courts rigorously to enforce arbitration agreements according to their terms, including terms that specify with whom the parties choose to arbitrate their disputes and the rules under which that arbitration will be conducted," the motion notes.

But the complaint argues that Lyft drivers are subject to an exemption for "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."

That exemption is inapplicable, Lyft argued Tuesday, first because the drivers aren't engaged in interstate commerce, as 98% of the rides using Lyft don't cross state lines.

Secondly, Lyft argued, ride-share drivers transport passengers, while the exclusion applies to workers transporting goods in interstate commerce.

"Even if Section 1 of the FAA exempts plaintiff's arbitration agreement with Lyft, the court must order arbitration pursuant to D.C. law, which does not contain an exception for agreements with workers engaged in interstate transportation," Lyft said in its motion.

"We are reviewing the papers and think we have strong responses to the motion," Osvatics' attorney Sally J. Abrahamson told Law360 on Wednesday.

The pandemic highlights the need for paid sick leave, the complaint said, because Lyft drivers come into contact with people from all over, including those traveling to and from airports, potentially exposing drivers to the virus.

Osvatics is seeking to represent a class of drivers who work or worked for Lyft in D.C. for at least 90 days between when Lyft started operating there and the date of final judgment in the suit.

The suit asks for an injunction to bar Lyft from continuing to violate the Accrued Safe and Sick Leave Act, seeks compensation for the value of paid sick leave denied by Lyft, and damages.

The Lyft website includes a page dedicated to how riders and drivers can protect themselves from COVID-19, including health guidance from the World Health Organization and the U.S. Centers for Disease Control and Prevention.

The company said it is providing funds to those who are diagnosed with COVID-19 and helping drivers access federal funds that include paid sick leave. But Christopher M. McNerney, an attorney for Osvatics, told Law360 last month that it's hard for drivers to get money from the fund and it doesn't address the fundamental issue in the case: that paid sick leave is needed, with or without a pandemic.

In March, Massachusetts Uber and Lyft drivers sick with what could be the coronavirus said in another suit that they continued to pick up riders because they needed to pay their bills.

In May, a judge said that while Lyft drivers may be able to prove they are misclassified as independent contractors, they hadn't shown they were harmed enough to justify an emergency preliminary injunction to secure paid sick leave.

Counsel for Lyft didn't immediately respond to requests for comment.

Osvatics is represented by Sally J. Abrahamson, Mikael A. Rojas, Pooja Shethji and Christopher M. McNerney of Outten & Golden LLP.

Lyft is represented by Elaine J. Goldenberg, Rachel G. Miller-Ziegler, Rohit K. Singla and Justin P. Raphael of Munger Tolles & Olson LLP.

The suit is Cassandra Osvatics v. Lyft Inc., case number 1:20-cv-01426, in U.S. District Court for the District of Columbia.

--Additional reporting by Lauren Berg. Editing by Haylee Pearl.

For a reprint of this article, please contact reprints@law360.com.

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Case Information

Case Title

OSVATICS v. LYFT, INC.


Case Number

1:20-cv-01426

Court

District Of Columbia

Nature of Suit

Labor: Other

Judge

Ketanji Brown Jackson

Date Filed

May 29, 2020

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