Proposed Lyft Settlement Maintains Dangerous Model of Employee Misclassification

Doug Bloch

(OAKLAND, Calif.) –– Today, the Teamsters Union and Lyft drivers will file legal objections to a class-action lawsuit settlement which would continue to misclassify Lyft employees in California as independent contractors. 

The objectors, who also plan to intervene in the lawsuit, will file their objections today in federal district court in San Francisco before Judge Vince Chhabria. 

The proposed settlement results from a class-action lawsuit brought in 2013 by two Lyft drivers who sought to be recognized as employees rather than independent contractors. 

“This settlement will leave Lyft’s business model intact, allowing Lyft to continue to treat its current and future drivers as independent contractors, and avoid properly paying them under California law. It’s unacceptable that Lyft refuses to recognize its employees, and in doing so, robs millions of workers and taxpayers in this state,” said Rome Aloise, Teamsters International Vice President and President of Teamsters Joint Council 7.

The Teamsters have also filed an unfair labor practice charge with Region 20 of the National Labor Relations Board (NLRB) in San Francisco, alleging Lyft’s business practice of misclassifying drivers and its one-sided “terms of use” imposed on its drivers deprives them of rights guaranteed under federal labor law, including the right to join a union. 

Under the proposed settlement, the average payment to drivers will be less than sixty dollars. Drivers who have labored for Lyft as full-time employees for several years could receive up to $1,000, still a small fraction of what they are owed as employees. 

The settlement maintains Lyft’s business practice of misclassifying their employees as independent contractors, which will cost workers and California taxpayers in the future. The settlement also provides for a notice to be sent to Lyft drivers that, under the settlement, they “can never sue Lyft again.”

One of the objecting drivers, Kelsey Tilander, became a driver for Lyft so that he could earn a good income while staying home part-time with his daughter. Instead, Tilander said his rates have been lowered by the company five times in 18 months and he’s working around the clock to make ends meet. 

Tilander says he and other Lyft drivers want to have the rights and benefits of employee status now and in the future, rather than a settlement which provides for a small one-time sum and approves of Lyft’s misclassification scheme.
 
“The settlement money isn’t that big of a deal. I would rather be classified as an employee,” Tilander said. “We’re not covered for unemployment, workers’ compensation or Social Security. I worked 48 hours last week for Lyft, but somehow I’m not an employee?”

“Everything that Lyft does indicates an employer-employee relationship, and saying otherwise is subverting responsibility in order to maximize profit,” said Angelica Ferdinand, a driver for Lyft and Uber.

The settlement would also lock-in Lyft’s unfair contractual terms, including terms that deprive drivers of a voice on the job; permit Lyft’s retaliation against drivers who seek to advance their rights; and prohibit drivers from filing class-action claims against Lyft in the future.  

“We have filed NLRB charges against Lyft because the terms and conditions it imposes on its drivers are illegal under federal labor law, and we expect the court reviewing this settlement will also recognize that fact,” said Teague Paterson, attorney with Beeson, Tayer and Bodine. 

In the past year, hundreds of drivers at tech companies, including Facebook, Yahoo, Apple, eBay and others in Silicon Valley, have organized with Teamsters Local 853 in San Leandro, Calif. The union has negotiated strong contracts for the drivers, including good wages, benefits and workplace protections. 

“If companies like Facebook can be step up to the plate and make sure drivers are treated with dignity and respect, there’s no reason why Lyft and other well-known ‘rideshare’ companies can’t do the same,” Aloise said.

The Teamsters Union is part of a growing movement of labor, faith and community-based organizations and workers challenging income inequality in Silicon Valley through an innovative partnership called Silicon Valley Rising. For more information, visit http://siliconvalleyrising.org. 

For more information on tech worker organizing with the Teamsters, visit http://teamster.org/tech-drivers-deserve-union. 

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the United States and Canada. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and “like” us on Facebook at www.facebook.com/teamsters.