Last week, Uber Technologies, Inc. and Lyft, Inc. announced that they would suspend ridesharing operations in the State of California in response to an August 10, 2020 San Francisco Superior Court judge’s preliminary injunction, requiring the companies to reclassify their California drivers as “employees” within 10 days.  The order came in the context of a lawsuit brought by California’s Attorney General Xavier Becerra and the City Attorneys of Los Angeles, San Diego and San Francisco, accusing Uber and Lyft of violating California’s recently enacted anti-independent contractor statute, known as “AB 5.”  However, before the trial court’s order could take effect and before Uber and Lyft suspended operations in the Golden State, the ride-sharing companies secured a temporary stay from the California Court of Appeal, which issued an order temporarily permitting Uber and Lyft to maintain their current driver classification as independent contractors rather than employees.

AB 5, which took effect on January 1, 2020, codified the now infamous “ABC Test” for determining whether a worker should be classified as an employee or an independent contractor.  AB 5 was introduced and championed by California Assemblywoman Lorena Gonzalez, a former CEO of the San Diego and Imperial Counties Labor Council, AFL-CIO, who, according to data from VoteSmart.org, received nearly 35% of her 2020 campaign cycle funding from the very same labor organizations that made AB 5 a legislative priority in their ongoing effort to unionize Uber, Lyft and other private-sector gig-economy employers.  While many employers secured job- and industry-specific exemptions, the gig-economy companies were not so lucky.

In response to AB 5, several gig-economy companies have sponsored a ballot measure – the “Protect App-Based Drivers & Services Act” – to establish a separate category of worker (in addition to employees and independent contractors) that would be eligible for certain minimum compensation and benefits.  The initiative received over one million signatures, and it will appear on the California ballot this November as Proposition 22.  Unsurprisingly, Proposition 22’s top donors are Uber, Lyft and other gig-economy companies, while the top donors to its opposition are nearly all labor organizations, including the SEIU, the California Federation of Teachers, and the California State Council of Laborers, each of which donated in excess of $200,000.

Even if Proposition 22 succeeds at the polls this fall, drivers, consumers and app-based companies face another hurdle:  As part of his campaign platform (which predominantly favors organized labor), Democrat nominee for President Joe Biden has indicated that he wants to federalize California’s ABC Test, which would threaten independent contractors nationwide.  So, if what Uber and Lyft contend is true (i.e., that classifying drivers as employees completely undermines the viability of the currently configured ride-sharing and delivery business), the end result may be a prolonged suspension of their operations from sea to shining sea – at least until driverless vehicles and drones become a viable alternative.

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Photo of Tony Oncidi Tony Oncidi

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including…

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection. A substantial portion of Tony’s practice involves the defense of employers in large class actions, employment discrimination, harassment and wrongful termination litigation in state and federal court as well as arbitration proceedings, including FINRA matters.

Tony is recognized as a leading lawyer by such highly respected publications and organizations as the Los Angeles Daily JournalThe Hollywood Reporter, and Chambers USA, which gives him the highest possible rating (“Band 1”) for Labor & Employment.  According to Chambers USA, clients say Tony is “brilliant at what he does… He is even keeled, has a high emotional IQ, is a great legal writer and orator, and never gives up.” Other clients report:  “Tony has an outstanding reputation” and he is “smart, cost effective and appropriately aggressive.” Tony is hailed as “outstanding,” particularly for his “ability to merge top-shelf lawyerly advice with pragmatic business acumen.” He is highly respected in the industry, with other commentators lauding him as a “phenomenal strategist” and “one of the top employment litigators in the country.”

“Tony is the author of the treatise titled Employment Discrimination Depositions (Juris Pub’g 2020; www.jurispub.com), co-author of Proskauer on Privacy (PLI 2020), and, since 1990, has been a regular columnist for the official publication of the Labor and Employment Law Section of the State Bar of California and the Los Angeles Daily Journal.

Tony has been a featured guest on Fox 11 News and CBS News in Los Angeles. He has been interviewed and quoted by leading national media outlets such as The National Law JournalBloomberg News, The New York Times, and Newsweek and Time magazines. Tony is a frequent speaker on employment law topics for large and small groups of employers and their counsel, including the Society for Human Resource Management (“SHRM”), PIHRA, the National CLE Conference, National Business Institute, the Employment Round Table of Southern California (Board Member), the Council on Education in Management, the Institute for Corporate Counsel, the State Bar of California, the California Continuing Education of the Bar Program and the Los Angeles and Beverly Hills Bar Associations. He has testified as an expert witness regarding wage and hour issues as well as the California Fair Employment and Housing Act and has served as a faculty member of the National Employment Law Institute. He has served as an arbitrator in an employment discrimination matter.

Tony is an appointed Hearing Examiner for the Los Angeles Police Commission Board of Rights and has served as an Adjunct Professor of Law and a guest lecturer at USC Law School and a guest lecturer at UCLA Law School.

Photo of Philippe A. Lebel Philippe A. Lebel

Philippe (Phil) A. Lebel represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, defamation, trade secrets, and breach of contract litigation, in both the single-plaintiff and class- and/or representative-action context, at both the trial and…

Philippe (Phil) A. Lebel represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, defamation, trade secrets, and breach of contract litigation, in both the single-plaintiff and class- and/or representative-action context, at both the trial and appellate level, and before administrative agencies.

In addition to his litigation work, Phil regularly advises clients regarding compliance with federal, state and local employment laws, and assists a variety of companies and financial firms in evaluating labor and employment issues in connection with corporate transactions. Phil also has experience assisting employers with sensitive employee investigations and trainings.  Phil also represents employers in connection with labor law matters, such as labor arbitrations and proceedings before the National Labor Relations Board.

Phil has assisted clients in a wide array of sectors including in the biotech, education, entertainment, financial services, fitness, healthcare, high-tech, legal services, manufacturing, media, professional services, sports, and staffing industries, among others.

Phil regularly speaks on emerging issues for employers and has been published or quoted in Law360, the Daily JournalThe Hollywood ReporterBusiness Insurance, and SHRM.org regarding a variety of labor and employment law topics.

During college, Phil worked on political campaigns in Atlanta, Georgia and Birmingham, Alabama, and was an intern with the National Gay and Lesbian Task Force and the Gay and Lesbian Victory Fund. Phil is a former member of the Board of Directors of the AIDS Legal Referral Panel.