Uber, Lyft lose first battle to CA

A sign supporting AB 5 posted in front of the California Capitol on August 28, 2019. Photo by Anne Wernikoff for CalMatters

The California vs. Uber/Lyft war is far from over — but Big Tech lost the first battle.

A San Francisco Superior Court judge issued a preliminary injunction Monday requiring the gig-economy companies to reclassify their drivers as full-fledged employees entitled to minimum wage, unemployment insurance, workers’ compensation and paid sick leave under the controversial state law AB 5. Uber and Lyft have 10 days to appeal, which they plan to do — though Judge Ethan Schulman said there was an “overwhelming likelihood” his ruling would prevail.

  • Lyft: “Drivers do not want to be employees, full stop. We’ll immediately appeal this ruling and continue to fight for their independence.”
  • Attorney General Xavier Becerra, who sued Uber and Lyft in May: “Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities. We’re going to keep working to make sure Uber and Lyft play by the rules.”

California’s clash with the rideshare giants has taken on heightened urgency amid the pandemic, with Uber and Lyft arguing that their independent-contractor model provides flexible work options and California arguing that it deprives workers of key benefits while allowing the companies to avoid paying into the state’s depleted unemployment insurance fund.

The state has multiple lawsuits pending against Uber and Lyft, including one filed last week by the California labor commissioner that accuses them of wage theft.

Uber and Lyft said reclassification would result in higher prices, fewer available rides and “hundreds of thousands” of drivers losing their jobs. It would also cost the companies — neither of which are profitable — hundreds of millions of dollars in back wages and benefits.

The companies had hoped to delay Becerra’s lawsuit until after voters weighed in on their $110 million November ballot measure that would allow drivers to remain independent contractors with some additional benefits.

  • Judge Schulman: “Defendants are not entitled to an indefinite postponement of their day of reckoning.”

Other stories you should know

1. Newsom remains mum on health officer’s resignation

Dr. Sonia Angell, Director of California Department of Public Health, at a press conference in the state capitol following the first COVID-19 death in California on March 4, 2020. Angell has just announced that she is resigning from her post. Photo by Anne Wernikoff for CalMatters
Dr. Sonia Angell at a press conference on March 4. Photo by Anne Wernikoff for CalMatters

Gov. Gavin Newsom on Monday refused to say whether the sudden Sunday resignation of the director of the state Department of Public Health was due to a tech glitch that led to a statewide underreporting of coronavirus cases — or the department’s failure to inform him of the issue for several days — though he said it was appropriate for him to accept Dr. Sonia Angell’s resignation, CalMatters’ Ana Ibarra reports. However, Newsom also took ultimate responsibility for the data snafu that backlogged 297,000 lab results, saying “At the end of the day, the buck stops with me.” He added the backlog was completely cleared over the weekend and the state is looking for a new lab reporting system with better capacity.

Newsom also said California can’t afford to participate in President Donald Trump’s proposed unemployment plan, which calls for states to chip in $100 of a $400 weekly benefit. The governor said it would cost the state $700 million a week and California has already spent or allocated most of its federal relief funds.

  • Newsom: “There is no money sitting in the piggy bank.”

2. California prisons spent nearly $500 million in overtime pay in 2019

In this June 9, 2014, file photo, an inmate is moved after a session with a psychologist at the the mental health unit at the California Medical Facility in Vacaville, Calif. Gov. Photo by Rich Pedroncelli, AP Photo
An inmate is moved after a psychology session at the the mental health unit of the California Medical Facility in Vacaville on June 9, 2014. Photo by Rich Pedroncelli, AP Photo

California’s prison system, which has been accused of excessive overtime spending for at least 20 years, spent nearly half a billion dollars on overtime pay in 2019 even as the inmate population shrunk — raising questions about employee burnout and patient care, CalMatters’ Raheem Hosseini reports. Psychiatric nurse-officers — who function as both nurses and gun-carrying guards, and exist only in California — were five of the top 10 overtime earners, with the No. 1 spot going to a nurse-guard who raked in nearly $186,000 in overtime pay. A decade after the dual position was eliminated, many nurse-officers are still being phased out of their roles, leading to a shortage of mental-health nurses — who in turn are forced to work overtime.

  • Michael Bien, lead counsel in a 1990 lawsuit that exposed inhumane mental health conditions in the prison system: “There’s always been a pattern of not filling the full-time positions and using overtime and registry instead.”

3. Nursing homes aren’t prepared for wildfires

Mark and Kathy Allen hold a photo of Mark's parents at their home in Sebastopol on July 29, 2020. Mark and Kathy evacuated Mark's mother and several other residents of the Villa Capri retirement community as the Tubbs Fire approached in October of 2017. Photo by Beth LaBerge, KQED
Mark and Kathy Allen hold a photo of Mark’s parents at their Sebastopol home on July 29. Photo by Beth LaBerge, KQED

Wildfire poses a significant hazard for 35% of California’s 10,000 long-term care facilities, and many aren’t prepared to safely evacuate elderly, vulnerable residents — pandemic or no, KQED reports in an investigative collaboration, “Older and Overlooked,” with CalMatters. The state Department of Public Health found 78% of nursing homes violated fire safety and emergency planning standards over a two-year period. Meanwhile, the demand for nursing home beds is rising as the Golden State ages faster than the rest of the country — and global warming is putting more communities at heightened risk of natural disasters.

  • Mark Allen, a Sebastopol resident who evacuated his mother from an assisted living facility during the 2017 Tubbs Fire: “She died because of the fire. She wasn’t killed by the fire, but because of the fire and the trauma that happened afterwards, it took all the will to live from her.”
  • Check out an interactive map of nursing homes in wildfire zones, questions to ask your loved one’s facility about disaster planning and the methodology used to analyze where older Californians are most at risk of wildfires.

4. How sea-level rise threatens California

A rock barrier fronts homes at the ocean's edge in Imperial Beach, California, March 2020. Photo by Peggy Peattie for CalMatters
A rock barrier blocks oceanfront homes in Imperial Beach in March. Photo by Peggy Peattie for CalMatters

Rising seas are likely to swallow as much as $10 billion of California property in the next 30 years and could erase up to two-thirds of Southern California’s shoreline by 2100, according to a Monday report from the nonpartisan Legislative Analyst’s Office.

The report reflects the latest science, which shows faster and higher rise than previously modeled. Researchers predict seas could swell as much as seven feet in the next 80 years.

Some key findings:

  • Three feet of sea-level rise combined with a 100-year storm could affect 15,000 jobs, $2 billion in property sales, and $2 billion in economic activity in San Diego County.
  • Four feet of sea-level rise would flood critical infrastructure in the Bay Area and cause daily flooding for nearly 28,000 residents.
  • About five feet of sea-level rise combined with a 100-year storm could flood more than 330 California facilities containing hazardous materials.

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