The California Court of Appeal recently ruled that Uber and Lyft cannot compel arbitration in claims brought in civil enforcement actions by the state and the Labor Commissioner through the Division of Labor Standards Enforcement.
The court emphasized that the State and the Labor Commissioner are not parties to the arbitration agreements between Uber and Lyft and their drivers. Consequently, the provisions of the Federal Arbitration Act and equitable estoppel do not support the imposition of arbitration in this case, the court pointed out.
In May 2020, the state filed a lawsuit against Uber and Lyft alleging a violation of California’s Unfair Competition Law by misclassifying their California transportation and delivery drivers as independent contractors instead of employees. This, according to the state, deprived workers of wages and benefits linked to employee status, thereby harming workers, competitors, and the public.
In August 2020, the Labor Commissioner filed separate actions against Uber and Lyft, alleging that the companies had misclassified drivers as independent contractors and had violated certain provisions of the Labor Code and wage orders.
Uber and Lyft filed motions to compel arbitration in the state and Labor Commissioner’s actions. However, the trial court denied these motions, and the Court of Appeal upheld this denial, emphasizing that the State and the Labor Commissioner were not bound by the arbitration agreements between the companies and their drivers.
In summary, the Court of Appeal held that the state and Labor Commissioner’s claims were not based on contracts between Uber and Lyft and their drivers, but on California’s Unfair Competition Law and Labor Code.
Facing misclassification or other labor violations? Don’t stay silent! Seek legal assistance to file a claim against your employer for violating your labor rights. Labor Law Advocates is here to provide guidance and steer you toward a fair resolution. Call us today for a free consultation.
