Court upholds dismissal of rideshare companies’ challenges to citations

A California appellate court ruled that rideshare companies Uber and Lyft could not bypass the administrative review process in challenging citations for failing to adequately safeguard their drivers.

The court’s decisions in Uber Technologies Inc. v. Department of Industrial Relations and Lyft Inc. v. Department of Industrial Relations were released Tuesday as unpublished opinions.

The case arose from citations that the California Division of Occupational Safety and Health issued to Uber Technologies and Lyft in August 2022 for failing to establish an effective injury and illness prevention program, failing to maintain records and failing to establish an effective COVID-19 program for their drivers.

Uber and Lyft appealed the citations to the state’s Occupational Safety and Health Appeals Board, asserting that Cal/OSHA did not have jurisdiction to issue the citations because its drivers are independent contractors, not employees.

Four individual Uber drivers and three Lyft drivers joined the appeal as defendants.

While their administrative appeals were pending, Uber and Lyft filed separate complaints for declaratory relief in a state trial court, seeking a judicial declaration that Cal/OSHA did not have jurisdiction to issue the citations.

Cal/OSHA and the driver defendants demurred. A trial judge sustained the demurrers without leave to amend on the ground that Uber and Lyft had not exhausted their administrative remedies.

The Court of Appeal for the 4th District of California affirmed.

The court explained that generally, a party must exhaust administrative remedies before resorting to the judicial system.

Cal/OSHA issued citations to Uber and Lyft pursuant to Labor Code Section 6317, which authorizes citations for safety violations by employers in California. When a citation is issued, Section 660 provides an administrative remedy: a right to bring it to the appeals board.

Uber and Lyft availed themselves of that administrative remedy, the court said.

The court said Uber and Lyft raised the same issue of their drivers’ employment status in the administrative appeal as they did in their complaints filed in the trial court. The allegations in their complaints demonstrate that their claims arose out of the Cal/OSHA citations, and the issues they raised are identical to those pending in the Cal/OSHA appeals, the appellate court said.

While Uber and Lyft contended that their court claims were broader than in the administrative appeals because they sought a declaration that their drivers are independent contractors “for all purposes,” not just the Cal/OSHA appeals, the court said there was no evidence that the companies have any pending controversy regarding the drivers’ employment status other than the Cal/OSHA appeals. Accordingly, any declaration as to the drivers’ employment status for any other purpose would be an impermissible advisory opinion, the court said.

Even if the issues presented by the rideshare companies in their complaints were proper subjects for declaratory relief, the court said, Uber and Lyft would still be required to exhaust their administrative remedies.

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