Massachusetts Court Fight Determines Uber, Lyft Gig Workers’ Status

(CTN News) – Massachusetts has become the latest battlefield in a years-long debate over whether Uber and Lyft drivers should be treated as independent contractors or employees.

A duelling ballot measure that would redefine the relationship between app-based drivers and companies such as Uber, Lyft, Instacart, and DoorDash whose businesses fuel the gig worker economy will be heard by the state’s top court on Monday.

According to an industry-backed proposal, app-based drivers would receive some new benefits as independent contractors, but would not be considered employees. Drivers of Uber and Lyft could unionize under a labor-backed proposal.

Maura Healey, the current Democratic governor of Massachusetts,

Filed a civil lawsuit against Uber and Lyft in 2020. According to Massachusetts, the companies unlawfully classified their drivers as contractors to avoid paying them overtime, earning sick leave, and paying a minimum wage.

Uber and Lyft could face a drastic overhaul of their business models if the industry fails in court and at the polls. In court documents, Uber’s lawyers said such a change could put the company at risk of cutting or ending its Massachusetts service.

Companies could be emboldened to exploit employees elsewhere if they win a victory in a state with some of the most employee-friendly laws.

As Shannon Liss-Riordan, a lawyer who has pursued cases against Uber and Lyft nationwide, said at an event on Tuesday regarding the ballot questions, the eyes of the country are on us this year – and in particular in November – because Massachusetts is ground zero for the fight.

Uber and Lyft have defended their drivers as employees even though the companies have significant control over working conditions. Gig work’s flexibility and drivers’ ability to work for competing apps are hallmarks of independent contracting, according to the companies.

A variety of studies show that companies can spend up to 30 percent more on employees than on independent contractors. According to a report released on Tuesday, Uber and Lyft avoided paying $266.4 million in workers’ compensation, unemployment insurance and paid family medical leave in Massachusetts by not classifying their drivers as employees.

In 2020, Uber, Lyft, and other companies spent $200 million to convince California voters to pass a measure similar to the one backed by the companies in Massachusetts, solidifying drivers as independent contractors. There is ongoing litigation challenging that measure.

It is not the first time that drivers have fought over their rights. As an example, Uber and Lyft in November reached a $328 million settlement with New York’s Democratic attorney general to resolve claims that they mistreated their employees.

Similar to the Massachusetts proposal, the companies in that settlement agreed to provide a minimum “earnings floor” and paid sick leave.

A ballot question committee backed by Uber, Lyft, DoorDash and Instacart has received millions of dollars from the industry for supporting state ballot measures that would keep app-based drivers as contractors, but set an earnings floor equal to 120 percent of the state minimum wage in 2023, or $18 an hour before tips.

Under these proposals, drivers would also be entitled to healthcare stipends, occupational accident insurance, and paid sick time.

Massachusetts’ Supreme Judicial Court blocked a ballot measure similar to the current industry-backed one from going to the ballot in 2022. A coalition of five different versions of the current ballot question is being collected by Flexibility and Benefits for Massachusetts Drivers, which intends to put only one version before voters on November 5.

A spokesperson for the ballot committee, Conor Yunits, said at the event on Tuesday that the ballot question will secure all of these things for drivers while preserving their minute-by-minute flexibility.

SEE ALSO:

Turkiye’s Inflation Reaches 70 Percent, Its Highest Level Since 2022