On March 11, 2015, a federal court was asked to decide, as a matter of law, whether Lyft drivers are “employees” or “independent contractors” under California law. The matter is Cotter v. Lyft, Inc., 2015 U.S. Dist. LEXIS 30026, No. 13-cv-04065-VC (N.D. Cal. Mar. 11, 2015). The “answer is of great consequence for the drivers, because the California Legislature has conferred many protections on employees, while independent contractors receive virtually none.” The answer is also of great import to companies like Lyft and Uber, because their business models assume the drivers are independent contractors.
A court may only decide this question as a matter of law if the application of the multitude of relevant factors would require any reasonable juror to reach the same conclusion. The principal question is whether a company to which service is rendered has the “right to control the manner and means” of accomplishing the desired result, whether or not that right is actually exercised. The court also examines secondary indicia, such as the length of time for which services are being rendered, etc. Here, in the case of the Lyft drivers, the court found that because numerous factors for deciding whether a driver is an employee or independent contractor point in decidedly different directions, a reasonable jury could go either way.
District Court Judge Vince Chhabria found that California’s employment laws do not quite cover the operational model of ride-hailing services like Lyft. According to Chhabria, the “jury in this case will be handed a square peg and asked to choose between two round holes.” Chhabria summed up his findings as follows:
“The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in addressing this 21st Century problem. Some factors point in one direction, some point in the other, and some are ambiguous. Perhaps Lyft drivers who work more than a certain number of hours should be employees while the others should be independent contractors. Or perhaps Lyft drivers should be considered a new category of worker altogether, requiring a different set of protections. But absent legislative intervention, California’s outmoded test for classifying workers will apply in cases like this. And because the test provides nothing remotely close to a clear answer, it will often be for juries to decide. That is certainly true here.”
“Accordingly, there must be a trial.”