Massachusetts sues Lyft, Uber for allegedly misclassifying drivers as contractors

Massachusetts is suing ride-sharing companies Lyft and Uber for allegedly misclassifying drivers as an independent contractors and denying them the benefits state employees are entitled to.

Massachusetts Attorney General Maura Healey announced the complaint on Tuesday, calling it a “big deal for our state.” The suit, filed in Suffolk Superior Court, is asking for a ruling that determines whether drivers for Uber and Lyft are employees under Massachusetts state law. It marks the second time this year that a state has filed a legal complaint against the ride-hailing companies over the classification of drivers as independent contractors instead of employees. 

California and a group of city attorneys in May filed a lawsuit against Uber and Lyft for allegedly breaking state labor laws. 

ANNOUNCING: We are suing @Uber and @Lyft for misclassifying their drivers.

Billion-dollar businesses don’t get to pick and choose which laws they follow. Tune in for our live press conference at 11AM here: https://t.co/ONVUH6HNBr pic.twitter.com/Xlm7tv82Yn

— Maura Healey (@MassAGO) July 14, 2020

In its complaint, Healey’s office alleged that the classification of drivers as independent contractors deprives them of “many basic rights and benefits that employees in Massachusetts are entitled to receive – including the right to full and timely payment of earned wages, minimum wage and overtime pay, earned sick leave, and anti-retaliation protections.” 

The suit is asking the court for a declaratory judgement that Uber and Lyft drivers are employees. It also requested an injunction preventing the companies from denying drivers protections afforded by state law.

“Uber and Lyft have built their billion-dollar businesses while denying their drivers basic employee protections and benefits for years,” Healey said in a statement. “This business model is unfair and exploitative. We are seeking this determination from the court because these drivers have a right to be treated fairly.”

Companies such as Uber and Lyft have held that drivers are independent contractors and therefore ineligible for benefits like unemployment insurance and paid time off. But some lawmakers have grown increasingly critical of that stance, claiming it puts Americans in untenable positions when it comes to things such as healthcare. 

Uber has vowed to fight the latest lawsuit in court. 

“At a time when Massachusetts’ economy is in crisis with a record 16 percent unemployment rate, we need to make it easier, not harder, for people to quickly start earning an income,” an Uber spokesperson said in a statement to The Hill. “We will contest this action in court, as it flies in the face of what the vast majority of drivers want: to work independently. We stand ready to work with the state to modernize our laws, so that independent workers receive new protections while maintaining the flexibility they prefer.” 

A Lyft spokesperson told The Hill that Massachusetts’ complaint “threatens to eliminate work for more than 50,000 people in Massachusetts at the worst possible time.”

“Drivers don’t want this — 89 percent of Massachusetts Lyft drivers drive fewer than 20 hours per week and choose to drive rideshare precisely because of the independence it gives them to make money in their spare time,” the company said. “Across the country, drivers have said they want to remain independent contractors over employment by a 4 to 1 margin.”

California Attorney General Xavier Becerra (D) cited the coronavirus pandemic while announcing the state’s lawsuit against Uber and Lyft in May. The legal action in California is part of officials’ attempts to get the companies to follow Assembly Bill 5, a new law which makes it harder for businesses to classify gig economy workers as employees.

“Californians who drive for Uber and Lyft lack basic worker protections — from paid sick leave to the right to overtime pay,” he said. “Sometimes it takes a pandemic to shake us into realizing what that really means and who suffers the consequences.”

Both Lyft and Uber have said they will provide financial assistance to drivers who test positive for COVID-19. The companies, which have faced severe economic hits amid the coronavirus outbreak, have also implemented procedures requiring drivers and passengers to wear face masks. 

Those policies have come amid a marked drop in demand, as the U.S. experiences an outbreak that has upended everyday life for four months now.