S.F., L.A. sue Handy.com over workers’ classification
San Francisco and Los Angeles on Wednesday sued Handy.com, which provides inhome services, for misclassifying its house cleaners and handypeople as independent contractors rather than employees.
“We cannot permit companies like Handy to unlawfully classify employees as independent contractors in order to cut costs or deprive workers of legal protections,” said San Francisco District Attorney Chesa Boudin, who jointly filed the case with Los Angeles County District Attorney George Gascón. “All Californians are harmed when corporations violate the law, exploit their employees and engage in systematic misclassification.”
Handy said the suit lacks merit. “It is based on a fundamental misunderstanding of the law and the rights of Handy and the Pros who use its service,” the company said in a statement. “Handy complies with all laws and regulations in California and elsewhere, and we will vigorously defend ourselves in court.”
Founded in 2012, the New York company has $110.7 million in venture capital backing, according to Crunchbase. In 2018, Handy was acquired by ANGI Homeservices, the parent company of Angie’s List and HomeAdvisor, for an undisclosed price.
The lawsuit, filed in San Francisco Superior Court, says Handy violated AB5, California’s landmark gigwork law that makes it harder for companies to claim workers are contractors, as well as Dynamex, a state Supreme Court decision on the same issue.
“Misclassifying workers as independent contractors instead of employees leaves them without crucial workplace protections such as the right to minimum wage; access to paid sick leave; disability insurance; and unemployment insurance,” the lawsuit said.
Boudin said Handy
controls its workers, including setting rates and billing customers. “It has all the hallmarks of an employeremployee arrangement,” he said. “It’s not a referral service for true independent contractors who set their own rates and collect fees from people they work for.”
The case seeks civil penalties, restitution for Handy workers in California, and to reclassify its workers here as employees.
Handy has about 9,000 cleaners and handypeople in the Bay Area, Boudin said, as well as about 13,400 in Los Angeles and 4,900 in San Diego. “All in, we’re talking about tens of thousands of people who in
our allegation are misclassified,” he said.
Boudin is also suing food delivery company DoorDash over worker misclassification under AB5, while the California attorney general’s office and the city attorneys of San Francisco, Los Angeles and San Diego are suing Uber and Lyft over the same issue.
Those cases seek penalties and restitution for the past, but they can no longer pursue reclassifying workers as employees because of Proposition 22, a ballot measure passed in November that keeps appbased couriers and drivers as independent contractors. Gig companies are so concerned about having to treat workers as employ
ees that they spent more than $220 million to pass Prop. 22.
Prop. 22 only applies to ride services and delivery companies. It does not apply to Handy, so there are no legal impediments to trying to compel turning its workers into employees.
Handy has been the focus of several legal actions over worker misclassification as well as onthejob harassment, even under laws that predated AB5. Like many companies, it has its gig workers agree to arbitration, which helps it keep cases out of court.
Handy’s arbitration agreements will not prevent the government case against it from going to court, Boudin said.
Shannon LissRiordan, a Boston attorney who has sued numerous gig companies over worker status, has a nationwide case against Handy that was compelled to arbitration. She is appealing that in hopes of getting a court date.
Byron Goldstein, an Oakland attorney, filed a classaction case against Handy in 2014. It was settled in 2017 through arbitration. Handy paid $1.2 million to compensate California workers, while denying any wrongdoing.
“We thought it was a strong case for misclassification,” he said Tuesday. “But arbitration agreements have in many instances insulated companies against the law.”
Vilma Zenelaj, a plaintiff in Goldstein’s case who worked as a cleaner for Handy in Los Angeles, told The Chronicle at the time that she felt she was treated like an employee without any of the benefits of employment.
“You had to wear their Tshirt,” she said. “You have to greet the customers with ‘Hi, I am Vilma from Handybook (the company’s former name); should I take my shoes off ?’ You had to ask a client how or whether to use the restroom. It was a very controlling situation.”