By Braden Campbell

Law360 (May 26, 2020, 12:50 PM EDT) -- Drivers for Uber and other app-based car services have sued the Empire State in federal court, alleging the labor department has slow-walked their claims for emergency unemployment benefits during the coronavirus pandemic by treating them as independent contractors.

The suit, filed Monday in the Eastern District of New York, alleges the state has violated the U.S. Constitution and the Social Security Act by making drivers jump through hoops to collect even after the state's highest court cleared their path to benefits. The drivers claim the state has delayed their access to unemployment by forcing them to prove their earnings rather than getting this data from their employers, as it does for workers it treats as employees.

"These failures delay the process for delivering benefits to drivers, often by up to eight weeks or more, for no discernible reason," the drivers allege. They have asked the court to make the New York State Department of Labor treat app-based drivers as employees and immediately provide them unemployment benefits.

Drivers MD Islam, Doh Ouattara, Abdul Rumon and Harnek Singh say the companies have misclassified them as independent contractors, and that the state has deprived them and other app-based drivers of months of much-needed benefits by going along with this label.

State and federal unemployment laws generally recognize two categories of worker: employees, who work at the direction of a business and enjoy certain benefits and protections, and independent contractors, who work for themselves and have few rights.

This legal dichotomy controls unemployment in New York. The state makes employers maintain and submit pay data for workers classified as employees, but not for independent contractors. Workers whose pay meets certain minimums can collect a portion of their salaries after they've lost their jobs. But workers whose pay isn't on file because they're classified as independent contractors get nothing, unless they can prove they were misclassified and that they earned enough to qualify for benefits.

The drivers started down this latter path to benefits by filing appeals after the state denied their applications in late March and early April, and months later, they're still waiting for help, they said Monday. This treatment "flies in the face of settled law," they said.

In July 2018, a New York State Department of Labor panel known as the Unemployment Insurance Appeal Board affirmed an administrative judge's ruling that three Uber drivers were employees and could collect benefits. And in March, the New York Court of Appeals — the state's highest court — said couriers for app-based food delivery service Postmates were also owed benefits.

"Given the Appeal Board's unambiguous and binding decisions regarding Uber drivers and the Court of Appeals' decision in Vega , the notion that app-based drivers in New York are not employees, or that their status for UI purposes is still unsettled is, at this point, simply absurd," the drivers said.

In light of these rulings, the delay in payments violates a provision of the Social Security Act making states provide benefits "when due" to workers, the drivers allege. The state is also violating the equal protection clause of the Constitution by treating app-based drivers worse than other workers, they claim.

An attorney for the drivers, Nicole Salk of Brooklyn Legal Services, said Tuesday they "are clearly employees under New York state unemployment insurance law."

"These app-based companies, Uber and Lyft, have failed to follow the law and the [NYSDOL] has failed to force them to follow the law," she said.

Governor's office spokesman Jack Sterne said Tuesday the state has been "moving heaven and earth" to provide gig workers benefits under the Pandemic Unemployment Assistance program, a federally funded emergency benefit for independent contractors and other workers not eligible for regular unemployment.

"We've delivered over $10 billion in benefits to 2 million unemployed New Yorkers — far more than any other state on a per-capita basis," Sterne said.

The workers' suit seeks benefits under the state's regular unemployment scheme.

The drivers are represented by Nicole Salk of Brooklyn Legal Services and Zubin Soleimany of the New York Taxi Workers Alliance.

Attorney information for the state was not immediately available Tuesday.

The case is MD Islam et al. v. Andrew Cuomo et al., case number 1:20-cv-02328, in the U.S. District Court for the Eastern District of New York.

--Additional reporting by Danielle Nichole Smith. Editing by Marygrace Murphy.

Update: This story has been updated with additional information and comment from an attorney for the drivers and a state spokesman.

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