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June 10 — Uber Technologies Inc. and Lyft Inc. violated a federal law that requires advance notice of mass layoffs as a result of their decision to cease operations in Austin, Texas, according to a pair of lawsuits filed June 9 in the U.S. District Court for the Northern District of California ( Todd Johnston v. Uber Techs., Inc. , N.D. Cal., No. 3:16-cv-03134, complaint filed 6/9/16 ; Thornton v. Lyft, Inc. , N.D. Cal., No. 3:16-cv-03135, complaint filed 6/9/16 ).
The lawsuits are the latest that call on courts to determine whether drivers for the smartphone app-based transportation services are employees or independent contractors.
The companies pulled out of Austin last month after voters rejected an ordinance that would have halted fingerprint-based criminal background checks for new ride-hail drivers in the city.
At the time, Lyft said in a statement the fingerprint requirements “make it harder for part-time drivers, the heart of Lyft’s peer-to-peer model, to get on the road and harder for passengers to get a ride.”
“The lawsuit is without merit and we look forward to resolving it quickly,” Lyft spokeswoman Chelsea Wilson told Bloomberg BNA in a June 10 e-mail. “It is based on federal law that applies to employees and not independent contractors like Lyft drivers who have the flexibility to determine when, where and for how long they drive.”
Uber immediately respond to a request from Bloomberg BNA for comment on the lawsuits.
Asked whether the companies could defend by saying the notice law doesn't apply because the drivers aren't employees, John Davis, an attorney for the drivers, told Bloomberg BNA, “it’s a fair assumption that Uber and Lyft will make that argument.”
“The purpose of the act is to allow employees to make arrangements for new employment,” Davis said. “We think that the drivers are employees.”
“Notice actually has to be physically transferred from the employer to the employee” in order to comply with the Worker Adjustment and Retraining Notification Act, Davis said June 10. And a notice has to reference the WARN Act, he said.
For these reasons, “an email from Uber or Lyft saying ‘we’re pulling out of Austin’ doesn’t suffice because that doesn’t reference the WARN Act,” he said. Media coverage of the companies' decision to end operations doesn't satisfy the notice requirement, he said.
Slack & Davis, LLP and the Brandi Law Firm represent the drivers. No one has entered an appearance for Uber or Lyft.
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