Politico

California to escalate legal battle with gig companies over worker classification


OAKLAND — California Attorney General Xavier Becerra plans to file a preliminary injunction in his classification fight with Uber and Lyft, escalating a battle with major technology companies, based on a memo sent Wednesday morning from his office.

Becerra and the attorneys of major cities filed a lawsuit earlier this year to compel gig tech companies to treat their drivers as employees, not independent contractors, per a newly operative California law that creates a statewide labor standard tilted more toward classifying workers as employees who must receive wage and benefit guarantees.

The California Department of Justice did not respond to multiple requests for confirmation, but a department attorney notified parties to the lawsuit of the state’s intent to seek the preliminary injunction, according to an email obtained by POLITICO. Becerra’s office intends to file the preliminary injunction request Thursday and seeks a July 23 hearing date.

App-based gig work companies are battling the new law, CA AB5 (19R), arguing it would decimate their business models and deprive workers of flexible income. The companies have argued the law does not apply to their workers, which prompted the Becerra lawsuit.

If granted, a preliminary injunction could force the gig companies to comply with the law.

Uber, Lyft, DoorDash, Postmates and Instacart have committed more than $110 million toward passing a ballot initiative that would let their workers remain independent contractors.

The companies are looking to the electorate after they were unable to sway the Legislature, and the courts are increasingly applying pressure. San Francisco District Attorney Chesa Boudin challenged DoorDash in court last week for illegally misclassifying its delivery drivers, another volley in a growing barrage of legal challenges to gig companies in California.

Stacey Wells, a spokesperson for the industry’s ballot initiative, blasted Becerra’s latest move by characterizing it as “yet another malicious legal action against drivers that underscores exactly why we’re pursuing the ballot measure.”

“It is baffling that anyone would seek to end this critical work, threatening 900,000 jobs, especially now,” she said in a statement.

Similarly, Uber previewed its likely message to voters in a statement assailing Becerra’s actions. “When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry,” the company said.

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