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Don’t Delete Your Lyft or Uber Apps Before October 2020, and Maybe Not Until May 2021; Appellate Court Grants Short Stay of Order Regarding Misclassification of Drivers

Posted in Employment Contracts and Agreements, Labor Law, Wage & Hour

A ruling today by an appellate court gives ride-sharing companies Lyft and Uber roughly two more months to treat their drivers in California as independent contractors.  That ruling follows a recent decision by a trial court in San Francisco that made national news by concluding that those companies had been misclassifying their drivers as non-employees under California law.

The San Francisco County Superior Court issued an injunction on August 10, 2020, ordering Lyft and Uber to begin classifying its California drivers as employees, rather than independent contractors, within ten days.  Complying with that order would require those companies, among other things, to start paying those drivers minimum wage and applicable premium pay for overtime hours.

Lyft and Uber each appealed that order.  In so doing, they threatened to abandon their operations in the Golden State immediately unless the courts stayed the injunction requiring drivers to be classified as employees.  The trial court refused to stay its order.  Today, however, the Court of Appeal ruled (in Case Nos. A160701 and A160706) that the injunction will not be enforced pending the outcome of the two companies’ now-consolidated appeals.

In most civil cases, it generally takes anywhere from one to two years after a litigant appeals before a California appellate court sets the date for the oral argument.  In some cases, the California Court of Appeal has been known to take as long as five years after the notice of appeal to schedule oral argument.  The date of oral argument is important because the California Court of Appeal cannot issue a decision before holding an oral argument if any party requests such a proceeding.

However, the drive on appeal in this case promises to be much shorter.  California’s First Appellate District ordered an expedited briefing schedule, barred any extensions of time except for extraordinary circumstances, and set oral argument to take place less than two months from now, on October 13, 2020.  This all but ensures that, if this briefing and oral-argument schedule is maintained, a decision will be issued no later than mid-January 2021.  Accordingly, the injunction could be on hold until what lawyers and the courts call “the remittitur” issues to the trial court as late as late May 2021.

That is because Article VI, section 19, of the California Constitution bars any judge from being paid a salary “while any cause before the judge remains pending … for 90 days after it has been submitted for decision.”  Section 68210 of the California Government Code also prohibits a judge from being paid a salary unless the judge signs “an affidavit stating that no cause before him [or her] remains pending … for 90 days after it has been submitted for decision.”  A civil case in the Court of Appeal is submitted and becomes pending “when the court has heard oral argument or approved its waiver and the time has expired to file all briefs and papers.”  (Cal. Rules of Court, rule 8.257, subd. (d).)

If the appellate court upholds the trial court’s judgment, it will take effect once the remittitur issues (which take approximately 100 days, unless the appellate court grants rehearing or the California Supreme Court grants review).  Lyft or Uber would have to ask the California Supreme Court to extend the stay of enforcement at that time.

Still, persuading the high court to grant such a reprieve could be difficult.  Indeed, it was the Supreme Court’s landmark ruling just two years ago, in Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, that spurred the state Legislature to pass A.B. 5.  That decision and its resulting legislation drastically curtailed the ability of California employers to classify workers as independent contractors.

Amidst all this litigation, voters will be asked to consider a ballot initiative this November, Proposition 22, that would overturn the Dynamex decision and A.B. 5.  If that ballot fails to pass, Lyft and Uber will be required to comply with the injunction within no more than 30 days after issuance of the remittitur in the appeal, which may be as late as May 2021.  Of course, if voters pass Proposition 22, this litigation may be moot.  Stay tuned, passengers in this case could be in for a bumpy ride.