OAKLAND, Calif. — A California appeals court has stayed an order that would have forced Uber and Lyft to reclassify their drivers, giving the companies a reprieve just hours before they planned to halt operations in California rather than comply.
A previous court order compelled Uber and Lyft to stop classifying their drivers as independent contractors by the end of Thursday. The companies said that if they did not win a reprieve, they would have no choice but to temporarily shut down in California because they do not have the time to make necessary changes to their workforces.
But California’s 1st Circuit Court of Appeal granted the companies’ request for a stay on Thursday morning. An Uber representative confirmed that the company would not pull cars off the road as planned; earlier in the day, a Lyft representative confirmed that relief from the courts would similarly allow the company to continue operating in California.
The decision is a critical victory for Uber and Lyft, buying them more time to fight a lawsuit filed by California Attorney General Xavier Becerra accusing them of violating California law by misclassifying their drivers.
“We are glad that the Court of Appeals recognized the important questions raised in this case, and that access to these critical services won’t be cut off while we continue to advocate for drivers’ ability to work with the freedom they want,” Uber spokesperson Davis White said in a statement.
Oral arguments are set for Oct. 13. Less than a month after that, California voters will make a critical decision by voting on Proposition 22, an initiative sponsored by gig companies that would let them continue treating workers as contractors while offering some wage and benefit guarantees.
But the companies are not off the hook. In granting the stay, the court ordered Uber and Lyft to submit sworn statements showing how they will comply within 30 days if their appeal fails and Proposition 22 does not pass.
Labor opponents blasted the companies for seeking to circumvent the law.
“When they get caught breaking law, the app companies throw a tantrum — using extortion tactics to intimidate elected officials, drivers, and consumers into giving them what they want: a blank check to rewrite laws that work for their bottom line and leave drivers out in the cold,” Mike Roth, a spokesperson for the labor-backed opposition campaign, said in a statement.
Becerra earlier this year sued the companies for running afoul of a new state law, Assembly Bill 5, that broadly requires more employers to treat their workers as employees, not independent contractors, under a framework created by the California Supreme Court.
A San Francisco trial court judge last week granted Becerra’s request for an injunction forcing the companies to reclassify their workers; the companies had urged the courts to wait as the underlying legal case played out.