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Law360 (July 14, 2020, 9:34 PM EDT) -- Massachusetts drivers told the Ninth Circuit that Uber's practice of classifying drivers as independent contractors and denying them paid sick leave amid the coronavirus pandemic has damaging consequences for the workforce, which justifies granting the drivers employee status through an injunction.
John Capriole, Martin El Koussa and Vladimir Leonidas, whose Massachusetts lawsuit was transferred to the Northern District of California in late March, filed an opening brief Monday seeking to reverse U.S. District Judge Edward Chen's May 14 decision denying their emergency motion for a preliminary injunction that would've immediately forced Uber Technologies Inc. to reclassify its drivers as employees and grant them paid sick leave.
The drivers maintain that for far too long, the ride-hailing giant has gotten away with labeling its drivers as independent contractors to deprive them of proper wages and benefits, which is all the more egregious during a global public health crisis.
According to Monday's brief, Uber drivers feel pressured to continue working and risking exposure to COVID-19 "because of their financial precarity and lack of paid sick leave," and the Ninth Circuit must step in to make things right.
"But now 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 opening brief. "Uber's misclassification of its drivers can and should be enjoined now."
The drivers contend there's ample evidence that Uber's practices present an immediate threat of irreparable harm justifying an injunction.
They also maintain that Uber can't hide behind its arbitration agreements to escape liability, and that Judge Chen improperly held in May that "Uber drivers do not perform an integral role in a chain of interstate transportation" that would make them exempt from arbitration under Section 1 of the Federal Arbitration Act.
Section 1 of the FAA exempts from arbitration "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." But the statute does not define the phrase "engaged in foreign or interstate commerce," nor does it specifically identify which "class[es] of workers" count toward the exemption.
The drivers said in Monday's brief that Judge Chen discounted or erroneously ignored evidence and relevant case law establishing that Uber drivers sometimes cross state lines, and that carrying passengers, not just traditional goods, are enough to prove they're "engaged in interstate commerce" for the purposes of FAA exemption.
The Ninth Circuit filing comes as officials in Massachusetts and California tighten the vise on ride-hailing companies like Uber and its rival Lyft Inc. for allegedly flouting state labor laws.
Massachusetts Attorney General Maura Healey's office on Tuesday kicked off a suit in Suffolk County Superior Court challenging Uber's and Lyft's policies of classifying drivers as independent contractors.
"Bottom line, Uber and Lyft have gotten a free ride for far too long," Healey said at a Tuesday press conference. "We think this is wrong. We think these companies are not abiding by state law, and drivers are paying the price."
California Attorney General Xavier Becerra, along with the city attorneys of Los Angeles, San Francisco and San Diego, launched suit in May claiming Uber and Lyft have been illegally classifying their drivers as independent contractors under a new state law that took effect earlier this year, giving the ride-hailing companies an unfair advantage over their rivals by doing so. California A.B. 5 heightened the legal bar for businesses to classify workers as independent contractors.
The drivers' attorney Shannon Liss-Riordan of Lichten & Liss-Riordan PC has said that ride-hailing companies cannot continue to evade the law and deny sick pay to their drivers.
Uber representatives weren't immediately available for comment Tuesday. But in a previous statement to Law360, the company said "at a time when a record number of employees in the state of California and the country have lost their jobs, we will continue our efforts to keep independent work available to all who want it while raising the standards of that work to better meet the needs of the moment."
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 and Vin Gurrieri. Editing by Adam LoBelia.
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