Plaintiffs Lawyers Pressure Lyft to Pay Millions in Arbitration Fees
Lyft car. Jason Doiy/ALM.
Lyft Inc. is facing increased pressure from plaintiffs attorneys who want the ride-hailing company to pay millions of dollars in arbitration fees that would allow thousands of drivers to bring individual claims that the company misclassified drivers as independent contractors rather than employees.
The plaintiffs firm Keller Lenkner, representing 3,420 Lyft drivers, on Thursday asked a San Francisco federal judge to compel the company to start the arbitration process by paying the fees, as required by drivers' employment contracts. The cost for initial fees would be $1,900 per case, a total of nearly $6.5 million.
The plaintiffs' new push to fight for arbitration—rather than against it—is part of an evolving strategy that comes a week after a similar action brought by Uber drivers. Gig economy companies have successfully convinced courts to enforce arbitration agreements, and now plaintiffs lawyers are testing just how willing companies will be to keep collective actions out of court.
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Lyft has yet to pay the fees for the first 1,123 demands for arbitration filed with the American Arbitration Association, or AAA, according to the motion to compel filed in the U.S. District Court for the Northern District of California. The association reportedly said it will not invoice the filing fees for the remaining arbitration claims until Lyft pays its initial bill. In addition to the filing fee of $1,900 for each demand, there is a $750 case management fee per case and the arbitrator’s compensation.
“As a result of Lyft’s failure to pay the filing fees as required by its contract, petitioners are prevented from accessing the sole forum in which they are able to raise their claims,” wrote Los Angeles attorney Keith Custis of Custis Law, who is working with the Keller Lenkner team. He later continued, “Lyft has repeatedly enforced this broad arbitration agreement to preclude drivers from filing claims against it in court.”
Travis Lenkner, managing partner at Keller Lenkner, declined to comment.
A representative for Lyft declined to comment. James Slaughter, a partner at Keker, Van Nest & Peters who has represented Lyft in high-profile cases, did not respond to a request for comment.
The Lyft drivers began filing demands for arbitration in October, and after negotiations fell through, AAA sent an invoice to Lyft to pay the filing fees necessary to begin the process for the first 1,123 claims.
Keller Lenkner is also representing 101 drivers in a lawsuit filed against Lyft, filed Wednesday in the San Francisco federal district court. Those drivers are disputing their employment status as independent contractors, who do not share some of the same benefits—overtime, minimum wage and health care—as employees. The worker classification distinction has emerged as a key dispute in the gig economy, whose leaders contend that the workforce enjoys greater flexibility than traditional employees.
Lyft has sued Keller Lenkner in a case that seeks to stop the firm from representing the drivers in these arbitration disputes. The company claims one of the firm's new partners, Warren Postman, a former U.S. Chamber lawyer who has worked with Uber and Lyft, has a conflict of interest.
Morgan, Lewis & Bockius attorneys, who represent Uber in a separate worker-classification dispute, are also moving to disqualify Keller Lenkner from representing Uber drivers. In that suit, the drivers contend Uber is saving hundreds of millions of dollars by classifying its drivers as contractors.
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