Lyft, Uber ask appeal court to rethink driver rules after Proposition 22

In light of Proposition 22's passage, which will change how state labor laws apply to app-based drivers, counsel for Uber and Lyft have asked a state Court of Appeal to reconsider its ruling that requires the companies to reclassify their drivers as employees.

"While the vote is not yet certified, the deadline for certification is December 11, 2020," Rohit K. Singla, Lyft's attorney and partner at Munger, Tolles & Olson LLP, wrote in a petition filed Friday. "Prop. 22 will thus become law no later than December 16, 2020, before the date the remittitur is currently slated to issue, December 22, 2020."

California voters passed Proposition 22 last week. When it goes into effect, the measure will create an exception for app-based drivers in Assembly Bill 5, so their independent contractor status will no longer be contingent on their ability to pass an "ABC" test. Assembly Bill 5, which went into effect on Jan. 1, automatically classifies workers as employees unless they meet all three prongs of the test.

Proposition 22 will also extend some benefits to drivers based on how many engaged hours they work, which includes the time between accepting a ride request and completing that ride.

Since the ballot measure passed, the 1st District Court of Appeal's decision to uphold a preliminary injunction requiring Uber and Lyft to comply with Assembly Bill 5 "is no longer consistent with California law," Singla wrote in his petition. The Court of Appeal had upheld the ruling in October, after a San Francisco trial court judge issued the preliminary injunction on Aug. 10. The case and preliminary injunction request was filed by Attorney General Xavier Becerra and several city attorneys. People v. Uber, A160706 (Cal. App. 1st Dist., filed Aug. 17, 2020).

The Court of Appeal "agreed with the trial court that the state had shown an 'overwhelming likelihood' of 'prevailing on the merits of their claim that Uber and Lyft were misclassifying their drivers as independent contractors in violation of AB5,'" Singla wrote. "In light of the change in law, the state cannot show an 'overwhelmingly likelihood' of success that would tip the balance of harms in its favor."

"There is no question that the injunction the trial court entered must now be vacated," Uber's attorney, Gibson, Dunn & Crutcher LLP partner Theodore J. Boutrous Jr., wrote in his own petition filed Friday. "The court should therefore 'grant rehearing' so it can apply 'the law in effect.'"

-- Jessica Mach