9th Circ. Says Lyft Drivers Can’t Escape Arbitration

The Ninth Circuit affirmed last week that a lower court decision pushing into arbitration claims that Lyft misclassified some drivers as independent contractors, saying the court ruled in another case that ride-hailing drivers aren’t exempt from the Federal Arbitration Act.

In an unpublished opinion, the three-judge panel upheld an April 2020 district court decision denying three drivers’ bid to force Lyft Inc. to reclassify its drivers as employees and grant them paid sick leave. The panel said that the appellate court ruled in August 2021 in Capriole v. Uber Technologies that ride-hailing drivers don’t engage in interstate commerce and are therefore not exempt from the FAA.

The drivers later pointed at the First Circuit's July 2020 ruling in Waithaka v. Amazon.com. And the Ninth Circuit's August 2020 decision in Rittmann v. Amazon.com.

In Waithaka, the First Circuit ruled that Section 1 of the FAA covers "transportation workers who transport goods or people within the flow of interstate commerce." A month later, the Ninth Circuit reached the same conclusion.

Lyft rejected the argument in November 2020, saying that the drivers didn't cross state lines and were therefore not protected by Section 1 of the FAA, which exempts from arbitration "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."

Rogers sued the ride-hailing company in March 2020 in San Francisco Superior Court, contending that Lyft didn't offer paid sick leave that California requires for employees.

The same day Lyft removed the suit to federal court in March 2020, Rogers urged the court to issue a preliminary injunction.

Later that month, Lyft moved to compel arbitration. Rogers filed an amended complaint the same month adding Ebadat and Farag, while also adding class allegations that other drivers were misclassified as independent contractors.

In April, a federal judge denied the drivers' motion for a preliminary injunction, axing the class allegations and compelling the individual claims to arbitration, saying that the drivers might have used the coronavirus pandemic as an excuse to have Lyft classify them as employees.

Shannon Liss-Riordan of Lichten & Liss-Riordan PC, who is representing the drivers, said Wednesday that they are disappointed with the decision and will seek further review.

"There's no reason there should be any difference between them and Amazon drivers, who have been recognized to fall under this exemption," Liss-Riordan said.

A spokesperson for Lyft and attorneys representing the company did not immediately respond to a request for comment Wednesday.

U.S. Circuit Judges Sidney R. Thomas and Consuelo Callahan sat on the panel for the Ninth Circuit. U.S. Circuit Judge Eugene E. Siler also sat on the panel by designation.

The drivers are represented by Shannon Liss-Riordan of Lichten & Liss-Riordan PC.

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