Law360 (April 3, 2020, 9:15 PM EDT) — A California federal judge ordered Lyft Inc. to provide detailed information about its efforts to help drivers affected by the COVID-19 pandemic Friday, a day after he called out the ride-hailing company’s disregard for the law and questioned whether Lyft drivers were using the crisis “as a hook to get a court ruling.”
U.S. District Judge Vince Chhabria said he wants “specifics and detailed answers” to two questions.
“First, how is Lyft helping drivers who have symptoms consistent with COVID-19? (This question is not limited to drivers who have been diagnosed),” Judge Chhabria wrote in his order. “Second, how is Lyft helping other drivers (regardless of whether they are sick) whose income streams have been decimated as a result of the pandemic?”
The order comes a day after a hearing on drivers’ emergency request for a public injunction requiring the ride-hailing company to designate drivers as employees, which would make them eligible for sick pay. The drivers cite concerns that Lyft is putting them and the public at increased risk during the coronavirus pandemic by not providing workers with paid sick leave, as required by California law.
At one point during the hearing, Judge Chabbria asked Lyft’s counsel what Lyft is doing to help all of the drivers who have lost more than 90% of their business.
“What is the company — that I think has a lot of money — doing to help the drivers in this crisis?” Judge Chhabria asked during the video hearing.
Lyft’s counsel James Slaughter of Keker Van Nest & Peters LLP directed the judge to a declaration by Lyft’s Vice President of Global Operations Angela Westbrock, but Judge Chhabria described Westbrock’s declaration as “unsatisfying” and “a little bit vague.”
Slaughter said that while he knew ride demand is “down dramatically,” he didn’t know what efforts Lyft had taken to help out-of-work drivers in light of the COVID-19 crisis.
“What about the hundreds of thousands of drivers in California who have lost income because of this?” Judge Chhabria asked.
Slaughter had no answers, but offered to collect information from Lyft and submit it to the court. On Friday, Judge Chhabria took Lyft up on its offer.
Judge Chhabria wrote in his order that Lyft’s brief should contain no legal argument, “just factual information about what Lyft is doing to alleviate the hardships being suffered by its drivers.”
During Thursday’s hearing, Judge Chhabria also called out Lyft for continuing to misclassify workers in disregard of California law, saying that the state’s recently enacted A.B. 5, which makes it more difficult for employers to classify workers as independent contractors, clearly applies to companies like Lyft.
But Judge Chhabria told the drivers seeking injunctive relief that while Lyft’s disregard for the law matters a great deal, “it kind of seems like you are using this to get a court ruling that you haven’t gotten yet.”
He said he’s not sure this situation qualifies as a true emergency, given that Lyft’s ridership has dwindled to almost nothing, the majority of Lyft drivers haven’t worked enough to accrue paid sick leave under state law, and the federal government has passed legislation providing COVID-19 relief benefits that apply to independent contractors.
Judge Chhabria also appeared to agree with Lyft’s argument that the injunctive relief is a private injunctive relief, saying at one point during the hearing that it “seems fairly clear it’s not a public injunctive relief.”
The drivers’ counsel, Shannon Liss-Riordan of Lichten & Liss-Riordan PC, told the judge an emergency order is crucial to safeguarding the drivers and the public during the pandemic, and that because Lyft is expanding its services to include delivering food and medical supplies, its drivers remain on the road.
But Lyft’s counsel insisted that the case be compelled to arbitration and said hundreds of thousands of California residents would lose access to the new federal COVID-19 relief benefits if the judge granted the drivers’ emergency request for injunctive relief.
Granting the injunction would result in “irreparable harm,” Slaughter told the judge, arguing that if it is granted, Lyft drivers would be entitled only to a couple of hundred dollars under state law instead of thousands of dollars under federal law.
Liss-Riordan argued that Lyft drivers could be considered employees under state law while simultaneously considered self-employed under federal law, to which Judge Chhabria responded “That argument cannot possibly be right” and requested supplemental information.
Lyft’s competitor Uber Technologies Inc. has found itself in similar position. On Wednesday, Liss-Riordan argued for Uber drivers’ emergency request for injunctive relief due to the pandemic.
The hearings on Lyft and Uber drivers’ emergency motions for injunctive relief come three months after California enacted A.B. 5, which codifies into law the landmark California Supreme Court decision in Dynamex Operations West v. Superior Court . The California statute requires employers to prove, among other things, that the worker performs work outside its main business in order to be classified as independent contractors.
The hearings also come one week after a Massachusetts federal judge ruled that Lyft can’t force its drivers there to arbitrate claims that they are being misclassified, saying the workers are exempt from the Federal Arbitration Act.
Liss-Riordan told Law360 on Friday it’s great that the judge is calling on Lyft to answer these questions, saying, “Lyft’s lawyer wasn’t clear at the hearing what Lyft is even doing.”
“Lyft and many gig economy companies are claiming to be helping their workers during the pandemic, but on closer inspection, many of those claims have turned [out] to be illusory,” Liss-Riordan said, noting that only 1,400 Uber drivers out of 1 million across the country have received any sick pay since the pandemic began.
Representatives for Lyft did not immediately respond to requests for comment Friday.
Lyft is represented by R. James Slaughter and Rachael Elizabeth Meny of Keker Van Nest & Peters LLP.
Rogers is represented by Shannon Liss-Riordan and Anne R. Kramer of Lichten & Liss-Riordan PC.
The case is Rogers et al. v. Lyft Inc., case number 3:20-cv-01938, in the U.S. District Court for the Northern District of California.
*Written by Hannah Albarazi via Law360*