Connect with us

Business

California Lodges Lawsuit Against Uber and Lyft for “Misclassifying” Drivers as Gig Workers, Not Employees

Published

on

  • California Attorney General Xavier Becerra filed a lawsuit on Tuesday against the ride-sharing companies Uber and Lyft.
  • The lawsuit alleges that the companies are violating state law by classifying drivers as contractors, not employees.
  • Notably, employee status could give drivers access to minimum wage and health benefits.
  • Uber and Lyft have argued that their business model is in technology, not rides. They have also argued that their drivers enjoy the independence given to them by being classified as contractors. 

California Sues Uber and Lyft

After passing a law aiming to reclassify over a million independent contractors as employees, California is taking that mission one step further by suing Uber and Lyft for their defiance to do so. 

California Attorney General Xavier Becerra filed the lawsuit on Tuesday. He was joined by a coalition of city attorneys, including those for San Francisco, Los Angeles, and San Diego.

In the lawsuit, Becerra alleges Uber and Lyft violated state law by classifying their drivers as independent contractors (AKA, “gig” workers) when they should actually be classified as employees.

“…Uber’s and Lyft’s misclassification of drivers deprives workers of critical workplace protections such as the right to minimum wage and overtime, and access to paid sick leave, disability insurance, and unemployment insurance,” the coalition said in a statement

The statement goes on to say that they are seeking “restitution for workers, a permanent halt to the unlawful misclassification of drivers, and civil penalties that could reach hundreds of millions of dollars.” 

If found guilty of violating the law, the riding-share companies could be forced to pay driver backwages, as well as fines for not paying state payroll taxes. Becerra has accused the companies of harming California taxpayers by avoiding “hundreds of millions of dollars in social safety net obligations.”

According to the lawsuit itself, Uber and Lyft utilized “…the illegitimate savings they gain from depriving their Drivers of the full compensation and benefits they earn as employees to offer their ride-hailing services at an artificially low cost, decimating competitors and generating billions of dollars in private investor wealth off the backs of vulnerable Drivers.”

Part of the reason Becerra and those other attorneys are saying these companies’ actions are illegal is because last year, California passed a law known as Assembly Bill 5. Notably, that law requires companies to treat their workers as employees instead of contractors if those companies control how workers perform tasks, or if their work is a routine part of the company’s business.

When A.B. 5 was drafted, it specifically targeted companies like Uber and Lyft. Since it went into effect on Jan. 1, both companies have resisted adhering to it. In fact, both Uber and Lyft, as well as DoorDash, have pumped $90 million into a campaign for a ballot initiative to exempt them from that law. 

Uber and Lyft Respond to Lawsuit

For its part, Uber has argued that its business lays in its technology, not its rides. Because of that, it has argued that drivers are not a routine part of its business. 

Both it and Lyft have also argued that their drivers prefer being independent and deciding when they work. 

According to a spokesperson, Uber plans to contest the lawsuit, saying that at the same time, it will push “to raise the standard of independent work for drivers in California, including with guaranteed minimum earnings and new benefits.”

“At a time when California’s economy is in crisis with four million people out of work, we need to make it easier, not harder, for people to quickly start earning,” the spokesperson added.

In its own statement, Lyft seemed to be less critical of lawsuit, saying the company is “…looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible, especially during this time when the creation of good jobs with access to affordable healthcare and other benefits is more important than ever.”

Could Ride-Sharing Drivers Be Classified in the Future?

Even though these companies are resisting this lawsuit, labor experts say other states with similar laws may also start to take action against them.

“Uber and Lyft have lived a kind of charmed life in terms of escaping law enforcement generally, and particularly with regard to employment law, Stanford law professor William B. Gould IV told The New York Times. “The attorney general’s action can’t help but have a positive influence on law enforcement generally against them.”

Despite Uber and Lyft saying their drivers like the independent model, California’s lawsuit still claims that those companies have enough control over drivers to classify them as employees.

“They hire and fire them,” it reads. “They control which drivers have access to which possible assignments.” 

“Uber and Lyft are transportation companies in the business of selling rides to customers, and their drivers are the employees who provide the rides they sell,” the lawsuit goes on to say. “The fact that Uber and Lyft communicate with their drivers by using an app does not suddenly strip drivers of their fundamental rights as employees.”

While the idea of independent hours and extra money is likely true for some of the companies’ drivers, for others, the work is a vital source of income. 

Facts like that have been made all the more evident since the coronavirus lockdown as many gig workers have struggled to claim unemployment or sick pay. In March, Congress included special provisions in the CARES Act to help gig workers receive unemployment benefits.

Still, even if a company like Uber doesn’t want to go all the way by classifying its drivers as employees, it does seem to agree that some level of change needs to be made on behalf of its drivers. 

In March, CEO Dara Khosrowshahi penned a letter to President Donald Trump asking for a new, third classification. Notably, that would mean drivers would be neither employees nor contractors. Under that potential classification, drivers would not see full employment benefits, though they would be provided with some health benefits.

The news of California’s lawsuit comes as Uber announced it was laying off 3,700 people on Wednesday, roughly 14% of its jobs. Additionally, Khosrowshahi has pledged to waive his base salary for the rest of the year.

That’s also on top of Lyft last week saying that it was cutting 17% jobs, putting hundreds of workers on unpaid furloughs, and trimming salaries.

See what others are saying: (The New York Times) (CNN) (NPR)

Business

“Cyberpunk 2077” Developer Agrees To Settle Lawsuit for $1.85M

Published

on

If approved, CD Projekt Red would pay just a small fraction of the $316 million it reportedly spent developing the game.


CDPR Agrees To Settle

Game developer CD Projekt Red (CDPR) has agreed to settle a class-action lawsuit related to its buggy launch of “Cyberpunk 2077” for $1.85 million, The Verge reported Thursday.

The lawsuit itself is actually a conglomeration of four different suits brought by shareholders who alleged that they were misled about the company’s financial performance. Since the game’s release, CD Projekt Red’s share price has fallen 54%.

The settlement must now be approved in court, but overall, it appears to be a small amount compared to the game’s $316 million budget. In fact, the game reportedly made $563 million in sales and only spent around $2.2 million on a refund campaign, though the developer’s overall refund cost for 2020 could have been as much as $51 million.

“Perhaps the plaintiffs didn’t have much of a case?” The Verge writer Sean Hollister speculated on why “it sounds like the lead plaintiffs and their lawyers negotiated for a fairly tiny sum here in exchange for ‘relinquish[ing] any and all claims against the Company and members of its Management Board.’”

“As expressly stated in the Term Sheet, execution of the Term Sheet does not imply admission of any responsibility on the part of the Company or any of the other defendants named in the case,” the negotiated settlement reads.

“Cyberpunk’s” Botched Launch

“Cyberpunk” was first announced in 2012, and for years, it was the subject of widespread fan anticipation. Seven years later, a release date of April 16, 2020, was given; however, that date was pushed back several times much to the ire of fans, some of whom even sent CDPR staff death threats.

The game was ultimately released amid fan pressure on Dec. 10, 2020, but it was so riddled with glitches that Sony infamously pulled “Cyberpunk” from its Playstation Store a week later, offering full refunds to all players who had purchased a digital copy. In June this year, “Cyberpunk” finally made its way back onto the Playstation Store following multiple patches and hotfixes from CDPR.

Despite “Cyberpunk” surpassing a massive 8 million pre-orders before launch, Bloomberg reported last week that “Where analysts had originally expected Cyberpunk sales of 30 million units in the year after the game’s release, they now expect 17.3 million copies to have been sold in that time.”

In October, CDPR delayed planned next-gen updates for both “Cyberpunk” and “The Witcher 3” until the first and second quarters of 2022, respectively.

“Apologies for the extended wait, but we want to make it right,” the developer said.

See what others are saying: (The Verge) (Engadget) (Video Games Chronicle)

Continue Reading

Business

E.U. Court Rules That All Member Nations Must Recognize Same-Sex Parents

Published

on

The decision comes after a child named Sara was left without a country to call home because she had two mothers.


The Child With No Citizenship

The European Court of Justice, the European Union’s highest court, ruled Tuesday that all 27 of its member states must recognize same-sex parents and their children as a family.

The ruling stems from a case involving two women and their newborn daughter, whose status as a family originally varied between member nations. As a result, the couple’s daughter was left without citizenship in any country.

The two women, Bulgarian citizen Kalina Ivanova and Gibraltar-born British citizen Jane Jones, found themselves unable to take their newborn child Sara out of Spain after she was born in the country. Because Spain recognizes same-sex marriage, both Ivanova and Jones were registered as the girl’s legal mothers on her Spanish birth certificate.

However, under Spanish law, Sara was unable to gain citizenship in the country since neither of her parents were Spanish citizens. On top of that, she was denied British citizenship because Jones “was born in Gibraltar of British descent, and under the British Nationality Act (1981), [Jones] cannot transfer citizenship to her daughter,” the LGBTQ+ advocacy group ILGA-Europe said in a press release.

That left the couple with one other option: register Sara as a Bulgarian citizen. Still, the Bulgarian government refused to issue Sara a legally-recognized birth certificate, arguing that she is ineligible to have two mothers. Officially, Bulgaria does not recognize either same-sex marriages or same-sex registered partnerships. 

“Currently, the child has no personal documents and cannot leave Spain, the country of the family’s habitual residence,” lLGA-Europe said. “The lack of documents restrict Sara’s access to education, healthcare, and social security in Spain.”

EU Ruling

In its Tuesday decision, the European Court of Justice ruled that children in the EU have a legal right to freely move between countries given that such a right is afforded to all EU citizens. Because of this, all countries are now required to uniformly recognize the child’s parents, even if they are of the same sex. 

“That refusal could make it more difficult for a Bulgarian identity document to be issued and, therefore, hinder the child’s exercise of the right of free movement and thus full enjoyment of her rights as a Union citizen,” the court said

Despite some member states like Bulgaria not legally recognizing same-sex couples, the court stressed that its ruling “does not undermine the national identity or pose a threat to the public policy” of those nations.

That’s because while Bulgaria doesn’t have to issue its own birth certificate for Sara, it does have to recognize the Spanish birth certificate and issue its own identity card or passport for Sara.

“We are thrilled about the decision and cannot wait to get Sara her documentation and finally be able to see our families after more than two years,” Sara’s parents said according to the ILGA-Europe release. “It is important for us to be a family, not only in Spain but in any country in Europe and finally it might happen. This is a long-awaited step ahead for us but also a huge step for all LGBT families in Bulgaria and Europe.”

See what others are saying: (The Hill) (Insider) (Politico)

Continue Reading

Business

GoFundMe Campaign Raises $8,700 for Waitress Who Was Fired After Not Sharing $4,400 Tip With Co-Workers

Published

on

The waitress said this was the only time management had ever tried to force her to pool a tip in her three-and-a-half years working at the restaurant.


Waitress Gets Fired After Receiving Massive Tip

An Arkansas waitress has received over $8,700 in donations online after she was fired from her job for refusing to split her half of a $4,400 dollar tip with the rest of the restaurant’s crew.

That waitress, Ryan Brandt, told local Nexstar outlet KNWA last week that she and another server received the tip after waiting on a group of more than 40 people at the Oven & Tap restaurant in Bentonville.

“It was an incredible thing to do and to see her reaction was awesome, to see what that meant to her, the impact that it’s had on her life already,” Grant Wise, who was part of the party Brandt served, told the outlet.

According to KNWA, Wise called the restaurant before his large party arrived and asked about its tipping policy since they intentionally planned to donate $100 each as part of a way to thank restaurant workers. At the time of his call, Wise said he was told the money would go directly to his party’s servers. 

“We knew servers were really hit hard through COVID, and it was something that we had come up with to help give back,” Wise told KFSM.

The outcome, however, was much different. After receiving the tip, Brandt and the other server were allegedly told by a manager that they needed to pool the tip with the rest of the workers on duty. Brandt told KNWA she had never once been asked to pool her tips in her three-and-a-half years at the restaurant prior to this.

Complying meant Brant would take home just 20% of her half of the tip.

At some point before leaving, Brandt informed Wise that her tip would be pooled with the rest of the staff. Wise, who had intended the money to only go to his servers, then asked management to return his tip, which he gave to Brandt directly outside the restaurant. The following day, Brandt said she was fired over the phone.

“It was devastating,” Brandt told local outlets. “I borrowed a significant amount for student loans. Most of them were turned off because of the pandemic but they’re turning back on in January and that’s a harsh reality.”

Oven & Tap did not speak on Brandt’s firing in its initial statement. Instead, it only said, “After dining, this large group of guests requested that their gratuity be given to two particular servers. We fully honored their request. Out of respect for our highly valued team members, we do not discuss the details surrounding the termination of an employee.”

In a follow-up statement, Oven & Tap owners Mollie Mullis and Luke Wetzel said, “The server who was terminated several days after the group dined with us was not let go because she chose to keep the tip money.”

“We recognize and regret that a recent incident in our restaurant could have been handled differently by reminding our team how we would be splitting any tips prior to the event, however, our policy has always been to participate in a tip pool/share with the staff. Tip sharing is a common restaurant industry practice that we follow to ensure all of our team members are adequately compensated for their hard work.”

Oven & Tap has still not specifically commented on why it fired Brandt, but Brandt told KNWA she believes it’s because she violated company policy by telling Wise that his party’s tip was going to be pooled. 

Online Fundraising Campaigns for Brandt

After learning of Brandt’s firing, Wise created a GoFundMe, which ultimately raised $8,732 for Brandt.

“[Brandt] is, from what I can tell, a very kind woman that was working two jobs to get by through the pandemic,” he said in his initial post. “She has incredible aspirations to grow her own business and I can tell has a servants-heart.”

Wise provided an update Tuesday saying that instead of closing the GoFundMe, he will keep the campaign open to raise additional money to “pay it forward” to a future group of restaurant staff who will wait on his party.

In January, we are going to host another $100 Dinner Club and I have invited [Brandt] to be our ‘Guest of Honor’!” he said. “Any dollar amount raised over the $8,732 that has already been raised and is being paid out to [Brandt] will be given directly to the staff of the restaurant we decide to eat at.”

“We will be working to ensure through this that all staff in the restaurant are tipped so everyone feels blessed by our dinner.”

As of Tuesday morning, the GoFundMe page has raised over $9,100.

See what others are saying: (KNWA) (Insider) (KFSM)

Continue Reading