By Max Kutner

Law360 (May 25, 2021, 6:28 PM EDT) -- The D.C. Circuit should get to consider whether Lyft drivers are engaged in interstate commerce and therefore exempt from a federal arbitration law, a worker-side employment law group said in a friend-of-the-court filing in a D.C. federal court case regarding paid sick leave.

In an amicus brief Monday, the National Employment Law Project said the lower court should grant a driver's May 13 request to certify an interlocutory appeal of a ruling compelling her to arbitrate claims that the company denied drivers paid leave amid COVID-19 by misclassifying them as independent contractors.

"So long as Lyft drivers are blocked from pursuing their claims collectively in court, neither individual arbitration by drivers nor actions by public enforcement agencies will be able to fully redress the harms of Lyft's misclassification," NELP said in its brief.

The potential harm meets the threshold for "exceptional circumstances" warranting interlocutory review, the group argued.

Independent contractors often lack benefits and protections required for employees, such as minimum wage, overtime pay and paid sick time.

Lyft does not give its drivers health protections, which is especially problematic during the COVID-19 pandemic, NELP argued.

"Without access to paid sick leave, affordable health insurance, state disability insurance or workers' compensation, misclassified drivers face significant challenges obtaining medical care or recuperating from health conditions that may arise on the job," NELP said in its brief.

If Lyft classified its D.C. drivers as employees, the drivers would have been eligible for up to 56 hours of sick leave under a local law, and up to 80 hours of additional paid leave during the pandemic, NELP argued.

"The leave available under these laws would have enabled — and would still enable — thousands of Lyft drivers across the district to stay home when they are sick with COVID-19, or when they fear they were exposed and infected, and seek preventive care/diagnosis," the brief said. "But Lyft has been flouting D.C. law, denying its drivers the right to paid sick days."

NELP's brief comes less than two weeks after former Lyft driver Cassandra Osvatics filed for interlocutory appeal. Osvatics had argued appellate review was necessary because there had been "widely disparate" district court rulings regarding whether ride-share drivers fit the Federal Arbitration Act exemption for certain transportation workers.

Under Section 1 of the FAA, "contracts of employment of seamen, railroad employees or any other class of workers engaged in foreign or interstate commerce" are exempt from arbitration requirements. But the statute does not define "engaged in foreign or interstate commerce" or "any other class of workers," leading to litigation.

Osvatics' request came after a D.C. federal judge in March granted Lyft's motion to compel arbitration. In a follow-up opinion in April, the judge said the driver had agreed to arbitrate and did not fit the transportation worker exemption.

"It is clear to this court that Osvatics objectively manifested her intent to enter into a contract with Lyft by clicking the 'I Accept' button at the bottom of Lyft's Terms of Service," U.S. District Judge Ketanji Brown Jackson said in the opinion.

And just because Lyft drivers sometimes transported passengers to and from airports and train stations did not mean they were engaged in interstate commerce, the judge said. The judge also held that the "class of workers" determination must be made at a nationwide level and not for a specific geographic area.

The dispute stems from a proposed class action Osvatics filed in May 2020 alleging that the company failed to comply with D.C.'s Accrued Sick and Safe Leave Act, jeopardizing the health and safety of drivers and the public, especially during the pandemic.

Osvatics had driven for Lyft from about November 2015 to June 2018. She had accepted the company's terms of service, which contained an arbitration agreement, in October 2015, October 2016, May 2018 and May 2020, according to Lyft.

Hugh Baran of NELP, who represents the amicus, said in a statement Tuesday that the judge's ruling warrants review because of its implications for drivers under the transportation worker exemption.

"It effectively dictates whether the significant harms Lyft's misclassification imposes on its drivers in the District of Columbia, on law-abiding employers and on public coffers will continue unchecked, or whether Lyft will finally be held accountable for its actions in a public court in this district," Baran said.

A NELP spokesperson deferred comment to counsel.

Pooja Shethji of Outten & Golden LLP, who represents Osvatics, said in a statement to Law360 on Tuesday, "NELP's brief confirms that both workers and the public lose when a company uses forced arbitration to shield its employment practices from judicial review."

Counsel and a spokesperson for Lyft did not immediately respond to requests for comment.

The drivers are represented by Christopher McNerney, Mikael A. Rojas and Pooja Shethji of Outten & Golden LLP.

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

NELP is represented in-house by Hugh Baran, and by Roseann R. Romano and Mark Hanna of Murphy Anderson PLLC.

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

--Additional reporting by Linda Chiem, Rachel O'Brien and Lauren Berg. Editing by Leah Bennett.

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