A California judge on Monday approved a statewide request for a preliminary banning Uber Technologies and Lyft from classifying their drivers as independent contractors rather than employees.
The verdict handed down by San Francisco Superior Court Judge Ethan Schulman was a defeat for the ride companies, as they defended the lawsuit on May 5 by State Attorney General Javier Beckera and the cities of Los Angeles, San Diego and San Francisco. Uber and Lyft have been accused of violating Assembly Bill 5 (“AB5”), requiring companies to classify workers as employees if they control how workers quit their jobs, or whether work is part of their normal routine.
In a 34-page judgment condemning companies that lose money for complying with state law as a “long and shameless denial,” Schulman said attorneys have shown “extreme potential” to sell Uber and Lyft, and can classify classified drivers as illegal.
Los Angeles City Attorney Mike Fuer said in a statement: “This is a tremendous achievement for the thousands of Uber drivers who work hard – and in this epidemic, taking risks every day – to provide for their families.” Schulman delayed enforcing his 10-day order to allow the appeal, which Lift said would continue.
Voters in California are expected to consider ballot measurement proposal 22 in November to classify application-based drivers as contractors. The state is the largest U.S. market for Uber and Lyft.
“Drivers don’t like to be employees,” Lift said in a statement. “Ultimately, we believe California voters will decide this issue and they will work with drivers.”
Uber did not immediately respond to requests for comment.
Hundreds of “gig” workers, including ride-healing companies and app-based food delivery services, were affected by AB5, which went into effect on January 1 and received widespread support from organized labor.
Defendants argued that they were not “hiring companies” covered by AB5, but “jumping in the face” of Uber’s claims in other lawsuits and their “collective efforts” to repeal the law in November.
He said denying employee’s benefits such as minimum wage, sickness and family leave, unemployment insurance and workers’ compensation insurance could cause significant losses to the public.
“These harms are not just abstractions; they cause real harm to real working people,” Schulman wrote.
The judge said that if Uber and Lyft found themselves guilty, state laws in their opposition would have contributed to the “far-reaching” effect of a ban. “Defendants cannot withdraw legislative orders because their businesses are so large that they affect the lives of thousands of people,” he wrote.