## Facts

- California Lyft drivers brought a putative class action alleging Lyft misclassified them as independent contractors and unlawfully denied statutory protections, including business-expense reimbursement under California Labor Code § 2802.
- Lyft operated a smartphone-based platform connecting passengers with drivers who used their own vehicles.
- Drivers had flexibility to choose when to work, to log on and off the app, and to accept, decline, or cancel ride requests.
- Lyft imposed detailed “Rules of the Road,” monitored driver performance metrics (including acceptance and cancellation rates), and reserved the ability to discipline or terminate drivers for policy violations, low ratings, or “below average” metrics.
- Named plaintiffs were terminated from the platform for alleged violations or performance issues (including use of an unapproved vehicle and low passenger ratings).
- The parties filed cross-motions for summary judgment seeking an as-a-matter-of-law determination that drivers were either employees (plaintiffs) or independent contractors (Lyft) under California law.

## Issues

1. Whether Lyft drivers were employees or independent contractors under California law applying the multi-factor Borello test.
2. Whether the undisputed facts entitled either side to summary judgment on worker classification.

## Decision

- The court denied plaintiffs’ motion for summary judgment.
- The court denied Lyft’s motion for summary judgment.
- The court held that the Borello factors pointed in both directions, creating triable issues of fact.
- The court concluded that a jury, not the court on summary judgment, must determine drivers’ classification on the record presented.
- In later proceedings, the court denied preliminary approval of a proposed class settlement as inadequate, then granted preliminary approval of a revised settlement and certified a settlement-only class of California Lyft drivers who provided at least one ride during a defined period.

## Legal Principles

- Under California’s Borello framework, the primary consideration is the hirer’s right to control the manner and means of the work, evaluated together with multiple secondary factors.
- Worker-classification determinations under Borello are fact-intensive and may be unsuitable for summary judgment where evidence supports either employee or independent-contractor status.
- Evidence relevant to “control” can include company rules governing conduct, performance monitoring, discipline, and broad termination discretion.
- Evidence relevant to independent-contractor status can include worker scheduling autonomy, discretion to accept work, worker-provided equipment and expenses, and episodic or part-time engagement.
- In reviewing a proposed class settlement, the court must determine whether it is fair, reasonable, and adequate, including whether counsel’s valuation of monetary claims and statutory penalties is internally consistent and non-arbitrary.

## Conclusion

The court held that the mixed evidence under California’s Borello test prevented either side from obtaining a categorical worker-classification ruling on summary judgment, requiring a jury to decide whether Lyft drivers were employees or independent contractors; related settlement orders applied heightened scrutiny to the adequacy and valuation of classwide relief.


Cotter v. Lyft, Inc., 60 F. Supp. 3d 1067 (N.D. Cal. 2015)