A U.S. District Court judge for the Northern District of California reportedly ruled recently that Uber Technologies Inc. can challenge a lawsuit alleging the company misclassified California drivers as independent contractors. According to Bloomberg Law, the ride-hailing giant is arguing that Prop. 22, which exempted the gig economy companies to classify its workers as employees, is retroactive.


The court reportedly certified a class of more than 4,800 Uber drivers who allege they were wrongly classified as independent contractors under AB 5, the state’s strict worker status rule. As aforementioned, Uber’s motion was granted to amend its reply to include Prop. 22, a ballot initiative approved by voters in November, which excluded ride-share and delivery drivers from the requirements of AB5. 


Uber’s challenge will reportedly include two defenses saying Prop. 22 presents a defense to independent contractor claims arising after its enactment, and that the class’ claims for the period before its enactment are abated under the new rule, according to Bloomberg.


Passed and signed into law by Governor Gavin Newsom in late 2019, AB 5 reclassifies most independent contractors or “gig” workers as employees, opening the door to receiving benefits and other perks usually reserved for full-time employees. But as it officially became law in Jan. 2020, it was immediately challenged by numerous industries, including rideshare companies. Uber and Lyft, in particular, held off drivers from being covered under the law, giving time for them to mount Prop. 22 for the Nov. election — which together with the food delivery companies, spent over $200 million on the campaign to pass. Ultimately, Prop 22. passed only days before a court order would have forced the companies to fall under AB 5 and start reclassifying employees.


Initially while certifying the class, Judge Edward M. Chen ruled that Prop. 22 didn’t apply retroactively, and therefore served only to limit the class period and foreclose damages after the law took effect. But in Apr., he walked back that ruling, agreeing with Uber that the retroactive application of the rule is ultimately a merits question that shouldn’t be decided in the context of class certification.


The class urged the judge to deny Uber’s motion to add the new defenses, arguing the motion is unreasonably delayed and would require them to re-conduct discovery. The class is prepared to file for summary judgment on Aug. 12.


In order to pass Prop. 22, Uber and Lyft made promises of providing its drivers with some benefits, like a health insurance subsidy. But now, California state lawmakers and drivers are saying the ridehailing companies have failed to make good on their campaign promises to deliver these benefits.


According to a Sacramento Bee report, drivers are finding that many of them don’t qualify for the stipends. The report noted that the stipends cover about 40% of the average premium for the lowest tier of a Covered California plan, especially if they have health coverage through the state. A survey commissioned by SEIU 721 reportedly showed that only 15% of drivers polled had applied for the stipend, and nearly 86% are likely to be deemed ineligible.


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Neama Rahmani is the President and co-founder of West Coast Trial Lawyers.

Neama graduated from UCLA at the age of 19 and Harvard Law School at the age of 22, making him one of the youngest graduates in the 200-year history of the…

Neama Rahmani is the President and co-founder of West Coast Trial Lawyers.

Neama graduated from UCLA at the age of 19 and Harvard Law School at the age of 22, making him one of the youngest graduates in the 200-year history of the law school. Upon graduation, Neama was hired by O’Melveny & Myers, the largest law firm in Los Angeles, where he represented companies such as Disney, Marriott, and the Roman Catholic Church.

But Neama wanted to help ordinary people, not corporations, so he joined the United States Attorney’s Office, where he prosecuted drug and human trafficking cases along the United States-Mexico border. While working as a federal prosecutor, Neama captured and successfully prosecuted a fugitive murderer and drug kingpin who had terrorized Southern California and was featured on “America’s Most Wanted.” Neama was then appointed to be the Director of Enforcement of the Los Angeles City Ethics Commission, an independent watchdog that oversees and investigates the elected officials and highest level employees of the City of Los Angeles, including the Mayor and City Council. He held that position until becoming a trial lawyer for the people.

Neama has extensive trial experience. He has led teams of more than 170 attorneys in litigation against the largest companies in the world. Neama has successfully tried dozens of cases to verdict as lead trial counsel, and has argued before both state and federal appeals courts. Over the course of his career, Neama has handled thousands of cases as attorney of record and has helped his clients obtain more than $1 billion in settlements and judgments.