Lyft driver lounge called the Hub, located at 2300 26th St. in San Francisco. (Photo: Jason Doiy/ALM)

A California state court judge has refused to grant an emergency motion in a case against Lyft Inc. that would reclassify drivers as employees, so that they can take advantage of state-mandated paid sick leave during the coronavirus pandemic.

In an order Thursday, Judge Ethan Schulman of San Francisco County Superior Court denied the Lyft drivers' emergency motion for preliminary injunction and granted motions brought by Lyft's Keker, Van Nest & Peters counsel to compel arbitration and stay the case.

Schulman agreed with U.S. District Judge Vincent Chhabria of the Northern District of California, who remanded the case to state court in April after finding that granting the motion could mean Lyft drivers would lose out on "thousands of dollars" of relief designated for independent contractors in federal coronavirus legislation. 

Judge Ethan Schulman, San Francisco Superior Court (courtesy photo)

Schulman said plaintiffs counsel at Lichten & Liss-Riordan failed to address the essential point of Chhabria's decision: "the extraordinary relief Plaintiffs seek would provide at most … modest benefits to a small subset of Lyft drivers, while potentially risking the eligibility of all Lyft drivers to receive substantially greater relief under the emergency federal legislation," he wrote.

Schulman contended that if he granted the motion, the maximum of three days of paid sick leave would be paltry, with records showing that about 41% of the drivers might not receive any time off at all, compared with the two weeks of paid time off and $600 a week in unemployment compensation from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The judge also noted "well-grounded" concerns expressed in an amicus brief submitted by former California Govs. Gray Davis and Arnold Schwarzenegger, who argued that granting the motion would "undermine or interfere with legislative efforts to extend relief in the crisis caused by the coronavirus pandemic."

Lichten & Liss-Riordan's Shannon Liss-Riordan said she was disappointed by the decision and has already filed an appeal. 

"The judge took Lyft at its word that obtaining sick pay benefits under state law would somehow risk drivers not being able to obtain the new federal benefits, and that's just not correct," she wrote in an email. "It is also unconscionable for Lyft to refuse to comply with California law that obviously applies to it and attempt to shift its burden to the federal government and ultimately taxpayers."

She also said she was surprised that the judge took into consideration "the clearly political" amicus brief from the governors.

"We noted that Governors Schwarzenegger's and Davis' former chief of staff Susan Kennedy now works for Lyft and she was fined more than $30,000 several years ago for not registering as a lobbyist for Lyft," she wrote.

Although amicus briefs are somewhat unusual in superior court, Benjamin Shatz of Manatt, Phelps & Phillips in Los Angeles and counsel to the governors, said that the Lyft drivers' action was important enough for the former politicians to share their input. 

"Govs. Davis and Schwarzenegger care deeply about California, understand California's economy and recognized that the emergency public injunction the plaintiffs sought was unwarranted and would be harmful under the circumstances of COVID-19," Shatz said in an email. "We were very pleased the Court granted permission for the amicus brief and even happier that the brief was useful in the Court's analysis."

He also emphasized that the case was about "forced reclassification in the middle of a national emergency, not about sick leave."

A representative for Lyft declined to comment directly on the decision.

Earlier this week, Lichten & Liss-Riordan and Gibson, Dunn & Crutcher announced that, after nine sessions of mediation with U.S. Magistrate Judge Joseph Spero, they resolved an identical complaint against Uber Technologies Inc. U.S. District Judge Edward Chen of the Northern District of California ordered the parties to meet in order to come up with a solution that makes it easier for drivers to take advantage of Uber's coronavirus relief programs without having to access overburdened and sometimes costly health care providers. As part of the agreement, Uber rolled out another financial assistance program that allows eligible California drivers to collect $360 in financial assistance without having to show a letter from a health official or doctor, as previous policies mandated.