Mike Kun Quoted in “California Courts Grapple with Proposition 22’s Gig Fallout”

Bloomberg Law Daily Labor Report

Michael S. Kun, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Los Angeles office, was quoted in the Bloomberg Law Daily Labor Report, in “California Courts Grapple with Proposition 22’s Gig Fallout,” by Maeve Allsup and Erin Mulvaney.

Following is an excerpt:

Uber Technologies Inc., Lyft Inc., and other gig companies want California courts to throw out rulings from last year that ordered them to treat drivers as employees, setting the stage for legal clashes that could mean millions owed to workers in cases filed before Proposition 22 passed.

How the voter-approved ballot measure will apply to pending cases involving app-based companies and California regulators raises complex issues that will work their way through state courts, starting at the trial level, attorneys said. …

In California, appeals courts have generally been hesitant to vacate preliminary injunctions against gig companies that predate Proposition 22, which carved out app-based drivers from Assembly Bill 5, a law that makes it harder for employers to classify workers as independent contractors instead of employees. …

Litigation Minefield

Rather than creating a clear pathway for California’s gig economy, Proposition 22 has added to a legal minefield, not just for the parties to pending litigation but for courts as well, said Michael Kun, an attorney with Epstein, Becker & Green PC. …

The California Supreme Court sidestepped the issue of Proposition 22’s application to existing litigation, declining Feb. 10 to directly take up review of an injunction requiring Uber and Lyft to treat drivers as employees in a lawsuit filed by the state.

The top court’s refusal to set aside the injunction means these issues will be decided by a trial court, resulting in a lengthier process than the gig companies may have hoped for, Kun said.

It’s possible trial courts will only dissolve injunctions after companies show they’re complying with the compensation and benefits provisions of Proposition 22, and that their workers do fall under the rule’s umbrella, Kun said. …

Still on the Line

Regardless of whether new injunctions are issued or prior injunctions are overturned, lawsuits filed before Proposition 22 will move forward.

That creates significant potential exposure in ongoing litigation with workers, whose cases can’t be tossed out because the ballot measure isn’t retroactive, Kun said—and not all gig companies are covered by the new rule.

“At this point, the only companies who should feel comfortable moving forward that they aren’t going to be sued for the alleged misclassification of workers are those that helped write and promote Proposition 22, because you have to believe they know the law and how to comply,” Kun said.