On March 11, 2015, the Northern District Court of California heard motions for summary judgment in two separate cases involving worker allegations of Cotter v. Lyft and O’Connor v. Uber. In both cases, the plaintiffs and defendants filed cross-motions for summary judgment asking the court to determine the workers’ status as a matter of law and to dismiss the suits. The rideshare companies engaged the workers as independent contractors and made them responsible for their own cars and expenses. The drivers contend they were misclassified as independent contractors and allege they should be eligible for the protections and benefits of employees.
Uber attempted to demonstrate it was primarily a software company offering a platform to connect drivers with riders. Judge Edward Chen was not convinced by this argument, and stated in his order dismissing the summary judgment motion, “Uber does not sell its software in the manner of a typical distributor. Rather, Uber is deeply involved in marketing its transportation services, qualifying and selecting drivers, regulating and monitoring their performance, disciplining (or terminating) those who fail to meet standards, and setting prices.”
Judge Vince Chhabria heard the cross-motion for summary judgment for Lyft. The Lyft plaintiffs relied on the recent cases ofAlexander v. FedEx Ground Package Systems and Ruiz v. Affinity Logistics. Judge Chhabria distinguished the Lyft case from the FedEx and Affinity Logistics cases on the basis that the control FedEx showed over Alexander was very detailed, and reasoned, “The experience of the Lyft driver is much different from the experience of the FedEx driver, underscoring why the plaintiffs have not established here that summary judgment should be granted in their favor.”
Neither the plaintiffs nor the defendants in these cases successfully established whether the drivers were employees or independent contractors as a matter of law. Therefore, the judges believed they could not summarily dismiss the cases and jury trials will be necessary to determine their correct classification. As Judge Chhabria pointed out, “The test the California courts have developed over the 20th Century for classifying workers isn't very helpful in addressing this 21st Century problem. Some factors point in one direction, some point in the other, and some are ambiguous. … But absent legislative intervention, California's outmoded test for classifying workers will apply in cases like this. And because the test provides nothing remotely close to a clear answer, it will often be for juries to decide. “
What’s the main take away of these cases? The laws surrounding worker classification are very complex. As long as there are multiple tests to determine contractor status, it is imperative for companies that engage independent contractors should do so with caution and have a process in place to document and support an independent contractor classification.