Dan Handman was quoted in a September 13, 2018 article in the Daily Journal entitled “Uber accused of misclassification by competitor in novel legal move.”
A limousine company has filed suit in the Northern District of California, claiming that Uber’s practice of classifying its drivers as independent contractors, rather than employees, creates a significant competitive advantage that constitutes an illegal pricing model.
The lawsuit cites the recent California Supreme Court decision setting out new standards for determining independent contractor status — the so-called “ABC test” (Dynamex Operations West Inc. v. Superior Court of Los Angeles County, 2018 DJDAR 3856). Diva Limousine Ltd. claims that Uber’s substandard employment practices hurt not only employees, but also law-abiding competitor businesses, in violation of California’s Unfair Competition Law (UCL) and Unfair Practices Act.
At issue in the new suit is the question of whether Diva Limousine, as a competitor, can use the Dynamex “ABC test” ruling as part of its UCL claim that Uber illegally undercut prices.
The Daily Journal asked Hirschfeld Kraemer LLP’s Daniel Handman to weigh in on Diva Limousine’s unique legal strategy. Handman said it will be an uphill battle to connect Diva’s market share issues with Uber’s misclassification.
“Ultimately, the critical issue here is going to be standing; whether a competitor has standing or the ability to say, ‘I can be the one to seek redress here. I am the one who gets compensated,’ even though the ostensibly illegal action is targeting someone else,” Handman said. “There’s a whole host of reasons why that could have happened, so drawing a straight line between one act or another or one cause and another effect is a difficult task.”
No matter how the Northern District rules, Handman expects the case to end up in the U.S. Circuit Court of Appeals.
To read the full Daily Journal article, click here (subscription required).
Daniel Handman is a partner in Hirschfeld Kraemer LLP’s Los Angeles office. For more information, contact him at firstname.lastname@example.org.