Tamara Devitt in HR Magazine: Uber, Lyft Drivers’ Status as Employees or Contractors

03/18/2015

In two cases stretching the boundaries of what it means to be an employee, juries will decide whether Uber and Lyft drivers are employees or independent contractors. The U.S. District Court for the Northern District of California rejected both companies’ motions for summary judgment on March 11, 2015, in two different cases.

The plaintiffs in O’Connor v. Uber Technologies, No. C-13-3826, maintained they were Uber employees entitled to the protections of the California Labor Code, such as the requirement that an employer pass on the entire amount of any gratuity that is paid, given to or left for an employee by a patron. Pointing to contracts signed by drivers that state the relationship between the drivers and Uber is “solely that of independent contracting parties,” Uber argued the drivers were independent contractors as a matter of law.

Many employers assume that if they have contracts designating workers as independent contractors that is enough, but Uber shows that may not be enough to prevail on a summary judgment motion, noted Tamara Devitt, an attorney with Haynes and Boone in Orange County, Calif.

The plaintiffs in Cotter v. Lyft, No. 13-cv-04065, similarly maintained that they were Lyft employees entitled to the California Labor Code’s minimum wage protections and right to reimbursement for expenses. Noting that Lyft drivers enjoy great flexibility in when and how often to work, Lyft argued they were independent contractors. “The answer is of great consequence for the drivers, because the California legislature has conferred many protections on employees, while independent contractors receive virtually none,” the court stated. “The answer is also of great import to Lyft, because its business model assumes the drivers are independent contractors.”

Excerpted from HR Magazine. To read the full article, click here (subscription required).

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