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California Sues Uber and Lyft, Alleging Drivers are Misclassified

posted by Fnord666 on Wednesday May 06 2020, @06:06PM   Printer-friendly
from the misclassification dept.

Arthur T Knackerbracket has found the following story:

The state of California is suing Uber and Lyft. Attorney General Xavier Becerra filed a lawsuit against the two ride-hailing companies on Tuesday alleging they've "exploited hundreds of thousands of California workers" by classifying their drivers as independent contractors rather than employees.

[...] The lawsuit alleges Uber and Lyft violated a California state law called AB 5, which aims to ensure workers have adequate labor protections by classifying them as employees. The suit was filed in San Francisco County Superior Court by the Attorney General's Office in conjunction with the city attorneys from San Francisco, Los Angeles and San Diego.

[...] Gig workers are considered essential workers, meaning they can continue to work as the virus spreads. Because they're still out there, delivering food to people in quarantine and transporting medical workers to and from hospitals, they can be more at risk of contracting COVID-19. Thousands of Uber and Lyft drivers have been infected with or exposed to the coronavirus, according to the companies, and at least five drivers have died from the disease.

An Uber spokesman said the company plans to fight the lawsuit. "At a time when California's economy is in crisis with 4 million people out of work, we need to make it easier, not harder, for people to quickly start earning," he said.

A Lyft spokesman said the company will work with state lawmakers "to bring all the benefits of California's innovation economy to as many workers as possible."

[...] The lawsuit seeks to fine the companies up to $2,500 for each violation under California law. If a court rules in favor of the state, Uber and Lyft could end up owing hundreds of millions of dollars in those civil penalties and in back wages to drivers.

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  • (Score: 1) by khallow on Thursday May 07 2020, @12:40PM (1 child)

    by khallow (3766) Subscriber Badge on Thursday May 07 2020, @12:40PM (#991288) Journal
    Flex hours doesn't allow you to just quit without warning for months and come back later. Uber driving does. Pizza delivery pays for miles when driving private vehicles.

    Insider trading? That's what you think defines an employee? Martha Stewart would like to have a word with you...

    Actually, yes, it's another indication. Employees are subject to black out periods [investopedia.com].

    The Securities and Exchange Commission (SEC) protects employees during blackout periods. This protection is so that employees are not at a disadvantage, and keeps directors and executive officers from purchasing or selling securities during the blackout.

    The primary purpose of blackout periods in publically traded companies is to prevent insider trading. For this reason, some employees who work for publically traded companies might be subject to blackout periods, because they have access to insider information about the company. The SEC prohibits employees, even top company officials, from trading based on company information that has not yet been made public, and blackout periods help to enforce that rule. That’s why publically traded companies may enforce blackout periods whenever insiders may have access to material information about the company, such as its financial performance. For example, a company may impose recurring blackout periods each quarter in the days before the release of an earnings report. Other events that can trigger a blackout period can include mergers and acquisitions, the imminent release of new products, or even the release of an initial public offering.

    Insider trading is still illegal, but there's a presumption that employees would have insider knowledge and hence, are blocked from trading during these periods by default.

  • (Score: 2) by Booga1 on Thursday May 07 2020, @03:16PM

    by Booga1 (6333) on Thursday May 07 2020, @03:16PM (#991348)

    The insider trading thing has no bearing on whether someone is considered an employee or not.
    Are you familiar with Martha Stewart's conviction for insider trading? She wasn't an employee of the company stock she sold. The person she got information from wasn't even an employee of the company either.

    Sure, employees have extra restrictions and what not, but it is absolutely not part of what designates whether someone is an employee of a company.