Supreme Court Won’t Hear Uber and Lyft Gig Worker Appeal

Uber and Lyft have lost a chance to have an appeal heard by the Supreme Court.

The case involves lawsuits brought against the companies by the state of California, which claimed Uber and Lyft had misclassified their workers. The high court declined to weigh in on the case, without offering comment, Politico reported Monday (Oct. 7).

Lyft did not respond to PYMNTS’ request for comment.

Uber counsel Theane Evangelis provided this statement:

“The California Court of Appeal’s arbitration decision violates the Federal Arbitration Act and conflicts with decisions of the U.S. Supreme Court and other courts. While the Supreme Court did not take this opportunity to weigh in now, it should do so in the future, holding once again that the FAA preempts state efforts to undermine arbitration agreements.”

“It is also important to note that the Supreme Court is still considering our constitutional challenge to AB5. As we explained in detail in our complaint in that case — and to which a three-judge panel of the Ninth Circuit unanimously agreed — in enacting AB5, the California legislature unfairly targeted my clients out of animus rather than reason. We’re asking the U.S. Supreme Court to grant review and give us our day in court.”

The companies had contended that the suits — which sought back pay for withheld minimum wage, overtime and other benefits — were without merit because the workers had signed arbitration agreements, the report said.

However, a California appeals court found last year that the state was enforcing its labor laws in filing the suit, and not suing on the workers’ behalf, making the arbitration agreements irrelevant, per the report.

The suits were filed before voters in California approved Proposition 22, which allowed Uber and Lyft to continue classifying drivers as independent contractors, according to the report.

The companies will now have to pay back wages to tens of thousands of drivers unless they settle with the state, the report said.

The news comes as workers are growing frustrated with the slow pace of payroll, especially with many workers living paycheck to paycheck.

“For gig workers, freelancers and contractors, the wait for payment is even worse, as they often wait longer than standard pay cycles, putting their livelihoods and businesses at risk,” PYMNTS reported in September.

Many contract and freelance workers said the current payment infrastructure is insufficient due to high fees, slow payments and currency conversion issues.

“As a result, 65% of freelancers reported losing or sacrificing wages by having to decline cross-border work in incompatible currency,” PYMNTS wrote. “One-third reported waiting three to five days to get paid, while 15% experienced delays of more than five days.”

To bolster workers’ financial well-being, companies can offer instant, on-demand payroll, letting workers access pay as it accrues instead of waiting for the standard payday. This upgrade to their financial security can improve employee loyalty, reduce turnover, and ultimately help employers reduce their training and onboarding costs.