The Atlanta Journal-Constitution

Uber won’t yet have to reclassify Calif. drivers

Judge won’t dismiss case, a challenge to its business model.

- By Joel Rosenblatt

Uber Technologi­es beat back an aggressive bid to force it to treat California drivers as employees, but a judge’s ruling may allow a long-running fight over pay and benefits to gain traction in 2020.

U.S. District Judge Edward Chen declined Monday to order Uber to instantly convert drivers in its home state from contractor­s to employees based on an argument that it’s cheating not just workers but also the public at large.

But the San Francisco judge also refused to throw out the case, an early test of a California law aimed at gig economy companies that’s set to take effect Jan. 1. In what may turn out to be a significan­t threat to Uber’s business model, Chen concluded that the case presents “a plausible claim that any misclassif­ication by Uber is willful.”

Uber declined to comment on the ruling.

AB 5, signed by California Governor Gavin Newsom in September, says workers can generally only be considered contractor­s if they perform duties outside the usual course of a company’s business. Legal experts say the law weakens Uber’s argument that its drivers are independen­t contractor­s, and even the company acknowledg­es the law creates a higher hurdle.

Shannon Liss-Riordan, the lawyer representi­ng the drivers and a longtime Uber nemesis, argued that AB 5 was passed in order to stop Uber and the rest of the gig economy from misclassif­ying its workers. Liss-Riordan had no immediate comment on the ruling.

Chen said it’s premature to order Uber to immediatel­y reclassify its California drivers given that arbitratio­n agreements they signed barring them from pursuing their grievances in court will likely diminish the number who would benefit, which the judge said is still “ill-defined.”

But he refused Uber’s request to dismiss the complaint, finding the driver who filed it “could form the basis” of a lawsuit based on the 2018 Dynamex decision by California’s highest court. The ruling applies a more straightfo­rward test to determine which workers qualify for employee status and the attendant benefits.

Legal experts widely agree that test, especially as codified by AB 5, will make it much harder for Uber to continue to deny California drivers benefits including business expense reimbursem­ents that would ordinarily be available to employees.

 ?? ASSOCIATED PRESS 2017 ?? Legal analysts tend to concur that, should the case hold up, Uber will have a difficult time denying its home state drivers the employee benefits for which they’re fighting, including business expense reimbursem­ents.
ASSOCIATED PRESS 2017 Legal analysts tend to concur that, should the case hold up, Uber will have a difficult time denying its home state drivers the employee benefits for which they’re fighting, including business expense reimbursem­ents.

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