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Arch Nemesis of Uber over Driver Pay Sues Before New California Law Inked

By | September 13, 2019

It didn’t take long for attorney Shannon Liss-Riordan to deploy a new weapon in her six-year war with Uber Technologies Inc. over driver pay.

Within hours of Uber thumbing its nose at a pending California labor law that could upend its business model, the Boston-based lawyer filed yet another lawsuit against the ride-hailing giant, part of her campaign to make gig-economy businesses pay their workers better.

Until now, Liss-Riordan has had limited success. Uber came out unscathed from a marathon battle she began in 2013, ending this year with a $20 million settlement allowing the company to keep classifying drivers as independent contractors rather than employees.

But this time, Liss-Riordan may have more leverage. This week, California lawmakers approved Assembly Bill 5, which guarantees workers employee status if their duties are in the usual course of a company’s business. The measure may force companies to start paying a minimum wage and overtime, and to provide benefits such as sick leave and health insurance.

Uber’s chief legal officer, Tony West, said Wednesday that the company would carry on the legal fight in defense of its position that drivers are contractors. Uber will continue to argue that its core business is technology, not transportation, meaning that its drivers won’t qualify as employees under the law’s new criteria, he said.

Those combative comments are what prompted Liss-Riordan to take on the company again in court.

“It was somewhat stunning that a company would be so defiant, with a state that has strongly stated that workers need to be protected,” she said Thursday in an interview. “Having dealt with Uber for many years, not surprised in a way, but it was stunning they would say that blatantly.”

All eyes are now on Governor Gavin Newsom, a Democrat elected last year who was expected to sign the bill into law but on Wednesday was reportedly still open to negotiating with Uber and its rival Lyft Inc. regarding possible exemptions from the legislation.

Liss-Riordan has specialized for 20 years in litigating on behalf of low-wage workers in a variety of industries, from exotic dancers to truckers. She has become the gig economy’s chief antagonist in court, at one point opening an office in California while fighting with Uber, Lyft and other Bay Area-based startups that rely on a casual workforce to keep costs down.

Read More: The Lawyer Who Took On Uber Is Suing IBM for Age Discrimination

She has also leveraged her status as a labor advocate to get into politics, now campaigning to take on U.S. Senator Ed Markey in the Massachusetts Democratic primary next year.

The case that Liss-Riordan brought against Uber in 2013 posed a threat to the company when she won class-action status to represent as many as 385,000 drivers in California and Massachusetts. That momentum was undone by an appeals court ruling last year that allowed Uber to force the vast majority of those workers into arbitration. That whittled the class down to about 13,600 drivers who were eligible for the $20 million settlement reached in March.

As recently as early May, Uber was facing more than 60,000 complaints filed by drivers in arbitration over their classification as contractors, including many brought by Liss-Riordan’s law firm. Just before the company’s initial public offering, Uber said it had settled “a large majority’ of those claims for between $146 million and $170 million.

Liss-Riordan’s new complaint in San Francisco federal court was filed Wednesday as a class action on behalf of all California drivers. An Uber spokesman on Thursday had no immediate comment on the complaint.

Liss-Riordan said she’s counting on recent court rulings, including one Wednesday from a Philadelphia federal appeals court, to get around Uber’s argument that drivers are barred by their arbitration agreements from suing as a group.

AB 5, if signed by Newsom, would codify a 2018 California Supreme Court legal test for defining when a worker is an employee. Liss-Riordan said her new lawsuit could include hundreds of thousands of drivers going back four years if California judges determine the high court’s ruling applies retroactively.

Whether the new suit will take six years to resolve, like her last one against Uber, she couldn’t say.

“This is why I’m running for the U.S. Senate,” Liss-Riordan said. “People are sleeping in their car. Corporations are trampling on rights and working people need a voice. That’s why I’m running. This needs to be nationwide. That’s why I want to go to Washington.”

The case is McCray v. Uber Technologies Inc., 19-cv-5723, U.S. District Court, Northern District of California (San Francisco).

–With assistance from Joel Rosenblatt.

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