Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 1 of 28
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
`
`
`*
`
`MELODY CUNNINGHAM,
`*
`
`FRUNWI MANCHO,
`
`MARTIN EL KOUSSA, and VLADIMIR *
`LEONIDAS, individually
`
`
`*
`and on behalf of all others similarly
`*
`situated,
`
`
`
`
`*
`*
`*
`*
`*
`*
`*
`*
`*
`*
`
`
`
`Plaintiffs,
`
`
`
`
`
`
`
`
`
`
`v.
`
`
`
`
`
`
`LYFT, INC., LOGAN GREEN, and
`JOHN ZIMMER,
`
`
`
`
`
`
`
`
`
`
`
`Defendants.
`
`
`
`
`
`
`Civil Action No. 1:19-cv-11974-IT
`
`
`MEMORANDUM AND ORDER
`
`May 22, 2020
`
`TALWANI, D.J.
`
`
`This putative class action, brought by Plaintiffs Melody Cunningham, Frunwi Mancho,
`
`Martin El Koussa, and Vladimir Leonidas, on their own behalf and on behalf of similarly
`
`situated individuals in Massachusetts who drive for Defendant Lyft, Inc. (“Lyft”), seeks a
`
`declaratory judgment under the Uniform Declaratory Judgment Act, 28 U.S.C. §§ 2201, et seq.,
`
`and asserts claims of misclassification as independent contractors under M.G.L. c. 149, § 148B,
`
`and for expense reimbursement, minimum wages, overtime and earned sick time under M.G.L. c.
`
`149, §§ 148, 148B, 148C, and M.G.L. c. 151, §§ 1, 1A. Defendants moved to compel individual
`
`arbitration of Plaintiffs’ claims, and when the court denied that motion, Defendants filed an
`
`interlocutory appeal. Now before the court is Plaintiffs’ Emergency Motion for a Preliminary
`
`Injunction [#90] and Defendants’ Emergency Motion to Confirm Stay Pending Appeal [#107].
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 2 of 28
`
`Defendants assert that, upon Defendants’ filing of their Notice of Appeal [#102], the
`
`court was divested of jurisdiction to act on any aspect of the case. Because the court is divested
`
`of jurisdiction to act on those aspects of the case involved in the appeal but is not precluded from
`
`issuing preliminary injunctive relief to preserve the status quo, Defendants’ motion to stay is
`
`GRANTED as to their obligation to file an Answer and as to discovery, but is DENIED as to
`
`consideration of Plaintiffs’ motion for injunctive relief.
`
`Plaintiffs’ motion seeks, in light of the extraordinary circumstances caused by the
`
`COVID-19 pandemic, an emergency preliminary injunction enjoining Lyft from misclassifying
`
`its drivers as independent contractors. Although Plaintiffs have a substantial likelihood of
`
`success on the merits of the underlying misclassification claim, the balance of equities weigh in
`
`Plaintiffs’ favor, and the requested injunction would support rather than harm the public interest,
`
`the motion for preliminary injunction is DENIED as Plaintiffs have not shown irreparable harm.
`
`I.
`
`Procedural History
`
`Plaintiff Melody Cunningham filed this action, on her own behalf and on behalf of
`
`similarly situated Lyft drivers in Massachusetts, alleging misclassification and non-payment of
`
`minimum wages and overtime by Lyft and its Chief Executive Officer Logan Green and
`
`President John Zimmer. Compl. [#1].1 The complaint has been amended twice, adding Plaintiffs
`
`Frunwi Mancho, Martin El Koussa and Vladimir Leonidas, and a claim for paid sick time. Am.
`
`Compl. [#61]; Third Am. Compl. [#147].
`
`
`1 Cunningham also filed a Motion for Injunctive Relief [#4] (the “Motion for Public Injunction”)
`to enjoin Defendants’ alleged misclassification of drivers, which the court has denied.
`Memorandum and Order [#88]. Plaintiffs have appealed the denial of the motion for public
`injunction. Notice of Appeal [#119].
`
`
`
`2
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 3 of 28
`
`Defendants responded with a Motion to Compel Arbitration and Stay Proceedings
`
`Pending Arbitration (“Motion to Compel Arbitration”) [#16], asserting that Plaintiffs were bound
`
`to individually arbitrate their claims.2 While Defendants’ motion was pending, the global
`
`COVID-19 pandemic arose. In light of the pandemic, Plaintiffs filed the pending Emergency
`
`Motion for a Preliminary Injunction [#90], asserting that Lyft’s failure to provide drivers with
`
`paid sick time required emergency redress.
`
`The court denied Defendants’ Motion to Compel Arbitration before addressing Plaintiffs’
`
`Emergency Motion [#90]. Mem. & Order [#98]. Defendants immediately appealed, see Notice of
`
`Appeal [#102], and filed the pending Emergency Motion to Stay [#107].3
`
`II.
`
`Defendants’ Emergency Motion to Stay [#107]
`
`Under Section 16(a) of the Federal Arbitration Act (“FAA”), a party may pursue an
`
`immediate interlocutory appeal of a district court’s denial of a motion to compel arbitration. 9
`
`U.S.C. § 16(a). Defendants have filed such an appeal. They argue that as a result, the court lacks
`
`jurisdiction “over the entire case,” and must automatically stay all proceedings pending appeal.
`
`Defs’ Mot. to Stay 1, 3 [#107].
`
`
`2 Defendants’ motion to compel arbitration was filed prior to Plaintiffs’ filing the Amended
`Complaint [#61]. The parties agreed to the court applying Defendants’ motion to compel
`arbitration and the parties’ briefing to the Amended Complaint. Stipulation [#64]. The Third
`Amended Complaint [#147] was filed after the court ruled on Defendants’ motion to compel. In
`accordance with the parties’ Joint Motion Related to Plaintiffs’ Third Amended Complaint
`[#142], made without prejudice to either sides’ arguments regarding a stay pending appeal or
`Defendants’ ability to challenge the court’s denial of their motion to compel arbitration, the court
`has extended the ruling on the motion to dismiss to the Third Amended Complaint [#147]. See
`Order [#173].
`
`3 Defendants’ motion also requested a brief extension of time to respond to Plaintiffs’
`Emergency Motion for a Preliminary Injunction [#90] and a telephonic status conference. The
`court granted these requests. Elec. Order [#111].
`
`
`
`3
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 4 of 28
`
`“The filing of a notice of appeal is an event of jurisdictional significance,” which
`
`“confers jurisdiction on the court of appeals and divests the district court of its control over those
`
`aspects of the case involved in the appeal.” Griggs v. Provident Consumer Disc. Co., 459 U.S.
`
`56, 58 (1982) (emphasis added). Thus, “[a]n interlocutory appeal ordinarily suspends the power
`
`of the district court to modify the order subject to appeal, but does not oust district-court
`
`jurisdiction to continue with proceedings that do not threaten either the appeal’s orderly
`
`disposition or its raison d’etre.” 16A Charles A. Wright et al., Federal Practice & Procedure
`
`§ 3949.1 (5th ed. 2016); see, e.g., Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373,
`
`378-9 (1985) (finding that during appeal of criminal contempt judgment based on noncompliance
`
`with a discovery order, district court retained power to modify earlier denial of motion to dismiss
`
`so as to certify the denial for interlocutory appeal where motion to dismiss was not involved in
`
`appeal and amendment did not “interfere with but instead facilitated review of the pending
`
`appeal . . . .”); United States v. Brooks, 145 F.3d 446, 455 (1st Cir. 1998) (“as a general rule, the
`
`filing of a notice of appeal ‘divests a district court of authority to proceed with respect to any
`
`matter touching upon, or involved in, the appeal.’”) (quoting United States v. Mala, 7 F.3d 1058,
`
`1061 (1st Cir. 1993)).
`
`Defendants argue that the court should follow the “majority rule” from other circuits
`
`staying cases during appeals in FAA cases. Defs’ Mot. to Stay 4-5 [#107] (citing Levin v. Alms
`
`& Assocs., Inc., 634 F.3d 260, 264-66 (4th Cir. 2011); McCauley v. Halliburton Energy Servs.,
`
`Inc., 413 F.3d 1158, 1160-62 (10th Cir. 2005); Blinco v. Green Tree Servicing, LLC, 366 F.3d
`
`1249, 1251-52 (11th Cir. 2004); Bombardier Corp. v. Nat’l R.R. Passenger Corp., 333 F.3d 250,
`
`252 (D.C. Cir. 2003); Bradford-Scott Data Corp., Inc. v. Physician Comput. Network, Inc., 128
`
`F.3d 504, 506 (7th Cir. 1997)). None of these cases, however, addresses a motion for preliminary
`
`
`
`4
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 5 of 28
`
`injunction. And several reiterate the Supreme Court’s guidance that district courts retain
`
`jurisdiction over matters not involved in the appeal. See e.g., McCauley, 413 F.3d at 1161
`
`(“[w]hen an interlocutory appeal is taken, the district court only retains jurisdiction to proceed
`
`with matters not involved in that appeal.”) (quoting Stewart v. Donges, 915 F.2d 572, 575-76
`
`(10th Cir. 1990), which in turn quoted Garcia v. Burlington N. R.R. Co., 818 F.2d 713, 721 (10th
`
`Cir. 1987)); Bradford-Scott, 128 F.3d at 505 (stating “[t]he qualification ‘involved in the appeal’
`
`is essential” and listing various collateral issues district courts retain control over after appeal has
`
`been filed) (quoting Griggs, 459 U.S. at 58).
`
`The court therefore considers the various matters presently before the court to determine
`
`whether the matter raised is “involved in the appeal.”
`
`A. Defendants’ Emergency Motion to Stay
`
`As a threshold matter, neither side disputes this court’s jurisdiction to consider
`
`Defendants’ Emergency Motion to Stay [#107]. Under Rule 8 of the Federal Rules of Appellate
`
`Procedure, “[a] party must ordinarily move first in the district court” for certain relief, including
`
`“a stay of the . . . order of a district court pending appeal.” Fed. R. App. P. 8(a)(1)(A).
`
`Defendants’ Motion to Stay, properly filed first in this court, implicitly recognizes the court’s
`
`jurisdiction to act on that motion, and the court proceeds to do so.
`
`B. Plaintiffs’ Emergency Motion for a Preliminary Injunction
`
`Rule 8 similarly requires that a party “must ordinarily move first in the district court for .
`
`. . an order . . . granting an injunction while an appeal is pending.” Fed. R. App. P. 8(a)(1)(C).
`
`Defendants’ contention that the court may not consider Plaintiffs’ Emergency Motion for a
`
`Preliminary Injunction [#90] ignores this requirement.
`
`In Teradyne, Inc. v. Mostek Corp., 797 F.2d 43 (1st Cir. 1986), the First Circuit carefully
`
`considered the effect of the FAA on a district court’s power to grant preliminary injunctive relief.
`
`
`
`5
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 6 of 28
`
`In that case, the district court had not yet determined whether the dispute was arbitrable when it
`
`granted a motion for a preliminary injunction. The First Circuit posited that if “the policy of the
`
`Arbitration Act precludes the grant of preliminary injunctive relief in an arbitrable dispute,” the
`
`district court’s grant of injunctive relief prior to deciding the arbitrability question was an abuse
`
`of discretion. Id. at 47. However, if the “Arbitration Act poses no bar to the grant of a
`
`preliminary injunction, then whether or not the dispute is arbitrable is irrelevant.” Id. (emphasis
`
`added).
`
`The First Circuit noted that three other circuits had examined the issue in detail and had
`
`concluded that “a court can, and should, grant injunctive relief in an arbitrable dispute pending
`
`arbitration.” Id.4 The First Circuit rejected contrary authority from the Eight Circuit and
`
`embraced the approach taken by the Second, Fourth and Seventh Circuits, concluding that “the
`
`congressional desire to enforce arbitration agreements would frequently be frustrated if the
`
`courts were precluded from issuing preliminary injunctive relief to preserve the status quo
`
`pending arbitration and, ipso facto, the meaningfulness of the arbitration process.” Id. at 51.
`
`
`4 The court considered Second Circuit precedent, stating “the Second Circuit held that the fact
`that the dispute was to be arbitrated did not absolve the court of its obligation to consider the
`merits of a requested preliminary injunction, that the proper course for the district court was to
`determine whether the dispute was a “proper case” for an injunction, id. at 47 (quoting Roso-
`Lino Beverage Distribs., Inc. v. Coca-Cola Bottling Co. of N. Y., Inc., 749 F.2d 124, 125 (2d
`Cir. 1984), and that “the injunction was the only way to preserve the status quo during the
`pendency of the arbitration proceeding.” Id. (citing Erving v. Va. Squires Basketball Club, 468
`F.2d 1064, 1067 (2d Cir. 1972)).
`
`The court also noted “[t]he Fourth Circuit [held] that nothing in § 3 [of the FAA] abrogated the
`equitable power of district courts to enter preliminary injunctions to preserve the status quo
`pending arbitration [and that t]he court also stated that it thought its decision would further rather
`than frustrate the policies underlying the Arbitration Act by ensuring that the dispute resolution
`would be a meaningful process.” Id. at 47-48 (citing Merrill Lynch, Pierce, Fenner & Smith, Inc.
`v. Bradley, 756 F.2d 1048, 1052, 1054 (4th Cir. 1985)). Finally, the court noted the Seventh
`Circuit “held that the right to arbitrate and to seek injunctive relief were not incompatible.” Id. at
`48 (citing Sauer Getriebe KG v. White Hydraulics, Inc., 715 F.2d 348, 350 (7th Cir. 1983)).
`
`
`
`6
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 7 of 28
`
`The First Circuit’s rationale in Teradyne undermines Defendants’ contention that this
`
`court may not consider Plaintiffs’ motion for a preliminary injunction while Defendants appeal
`
`the order denying their motion to compel arbitration. Under Teradyne, a district court may
`
`exercise its traditional equitable powers to grant preliminary injunctive relief even while
`
`arbitrability is unsettled because whether the dispute is arbitrable is irrelevant to the pending
`
`preliminary injunction. If the court has authority to consider a motion for preliminary relief
`
`before addressing the motion to compel arbitration, it certainly has authority to consider that
`
`same motion after denying the motion to compel arbitration, despite Defendants’ appeal.
`
`Defendants’ response that Plaintiffs do not seek to preserve the status quo pending arbitration but
`
`seek “a wholesale makeover” of Lyft’s business, Defs’ Mot. to Stay 13 [#107], goes to the merits
`
`of that motion, and not the court’s power to consider it.
`
`Defendants argue that Optum, Inc. v. Smith, 366 F. Supp. 3d 156, 159-60 (D. Mass.
`
`2019) (“Optum II”) counsels for a different outcome. The court disagrees. In Optum, Inc. v.
`
`Smith, 360 F. Supp. 3d 52, 56 (D. Mass. 2019) (“Optum I”), the court determined it had
`
`authority to decide whether the requested temporary restraining order (“TRO”) was justified to
`
`preserve the status quo before issuing an order compelling arbitration based on “the nearly
`
`uniform views of the Courts of Appeal that have addressed this issue.” 360 F. Supp. 3d at 56
`
`(citing Teradyne, 797 F.2d at 51). Based on this finding, the court denied the motion to compel
`
`without prejudice to the issuance of an order compelling arbitration after the motion for a TRO
`
`was decided. It was this order that was on appeal when the court granted a stay in Optum II. In
`
`doing so, the court specifically noted the First Circuit “might find that the pending motion for a
`
`TRO is an ‘aspect[] of the case involved in the appeal.’” Optum II, 366 F. Supp. 3d at 160. In
`
`
`
`7
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 8 of 28
`
`contrast, Defendants’ appeal here concerns only whether arbitration must be compelled and not
`
`whether the court may assert jurisdiction over Plaintiffs’ motion for preliminary injunctive relief.
`
`Finally, Defendants argue that even if the court determines that it is not barred from
`
`asserting jurisdiction by an “automatic” stay, the court should nonetheless decline to consider
`
`Plaintiffs’ motion and grant a discretionary stay pursuant to Hilton v. Braunskill, 481 U.S. 770,
`
`776-77 (1987). A court may grant a discretionary stay based on weighing four factors: (1)
`
`whether the applicant has made a strong showing of success on the merits; (2) whether the
`
`applicant will be irreparably harmed absent a stay; (3) whether issuance of the stay will injure
`
`other parties; and (4) where the public interest lies. Acevedo-Garcia v. Vera-Monroig, 296 F.3d
`
`13, 16 n.3 (1st Cir. 2002) (citing Hilton, 481 U.S. at 776-77). “[T]he first two factors” are “the
`
`most critical.” Nken v. Holder, 556 U.S. 418, 434 (2009).
`
`The first factor does not require the movant to convince the court that it was wrong on the
`
`decision now under appeal, but instead to show that the appeal raises “serious and difficult
`
`questions of law.” Reaves v. Dep’t of Corr., 404 F. Supp. 3d 520, 522 (D. Mass. 2019). The
`
`Defendants have made this showing.
`
`However, Defendants have not shown how the court’s consideration of Plaintiffs’ motion
`
`for a preliminary injunction will cause them irreparable harm. As noted above, Fed. R. App. P. 8
`
`generally requires movants to bring motions for preliminary injunction in the district court before
`
`bringing such motions in the appellate court. This procedural requirement undermines the notion
`
`that Defendants will be irreparably harmed by the court’s consideration of Plaintiffs’ motion. In
`
`addition, while Defendants argue they face irreparable harm if the court issues a preliminary
`
`injunction that will “profoundly disrupt Lyft’s and its drivers’ expectations” of bilateral
`
`arbitration rather than class proceedings, Defs’ Mot. to Stay 11 [#107], Defendants speak only to
`
`
`
`8
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 9 of 28
`
`the specifics of Plaintiffs’ proposed injunctive relief, not to the threshold question of the court’s
`
`ability to consider Plaintiffs’ motion. And as to any relief the court may offer, Defendants may
`
`immediately appeal the grant of injunctive relief. Morales Feliciano v. Rullan, 303 F.3d 1, 6 (1st
`
`Cir. 2002) (quoting 28 U.S.C. § 1292(a)(1)).
`
`In comparison, Plaintiffs were the prevailing party on the motion to compel arbitration
`
`and have asserted exigent circumstances necessitating a preliminary injunction to prevent
`
`irreparable harm due to the COVID-19 pandemic. As noted above, addressing the matter now
`
`does not interfere with the First Circuit’s review of the arbitrability appeal.
`
`Finally, considerations of judicial economy suggest any stay should not preclude this
`
`court’s consideration of Plaintiffs’ pending motion. If the court accepts Defendants’ argument
`
`and stays consideration of the motion, Plaintiffs will likely file a motion with the First Circuit to
`
`lift the stay so as to send the preliminary injunction motion back to the district court to decide, or
`
`alternatively burden the First Circuit with considering a motion for equitable relief in the first
`
`instance. In either event, the First Circuit will be faced with questions unrelated to the
`
`arbitrability appeal that may be better addressed first by the district court. If the court rejects the
`
`stay Defendants seek and considers the motion for a preliminary injunction, either side may
`
`appeal the court’s decision and the First Circuit will be able to receive a consolidated record to
`
`facilitate a more complete appellate review.
`
`C. Answer and Discovery
`
`In the absence of a stay, Defendants would be required to answer the complaint and the
`
`parties would engage in discovery. See Fed. Rs. Civ. P. 12, 16, and 26. In Lummus Co. v.
`
`Commonwealth Oil Ref. Co., a case that predated § 16(a) of the FAA, the First Circuit stayed
`
`discovery pending resolution of an arbitrability appeal. 273 F.2d 613, 613-14 (1st Cir. 1959).
`
`
`
`9
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 10 of 28
`
`The First Circuit explained that “a court order of discovery would be affirmatively inimical to
`
`appellee's obligation to arbitrate” and that “if arbitration is to be had of the entire dispute,
`
`appellee's right to discovery must be far more restricted than if the case remains in a federal court
`
`for plenary trial . . . .” Id. at 613. The court determined a stay of discovery was appropriate
`
`because, “[u]ntil it is determined whether this action has been properly brought, appellee should
`
`not receive unnecessary fruits thereof.” Id. at 614. Plaintiffs have made no argument that a stay
`
`of discovery or of Defendants’ obligation to answer the complaint should not similarly apply
`
`here. Accordingly, following Lummus Co., the court stays this action as to Defendants’
`
`obligation to answer the complaint and as to discovery.
`
`III.
`
`Plaintiffs’ Emergency Motion for a Preliminary Injunction [#90]
`
`Plaintiffs ask the court to enjoin Lyft from misclassifying its drivers as independent
`
`contractors, thus entitling them to the protections of Massachusetts wage laws, including paid
`
`sick time. Because Plaintiffs’ motion was filed as an emergency motion based on the current
`
`health crisis, and because the court has previously considered and denied Plaintiffs’ motion for
`
`broader relief, the court treats this emergency motion as seeking classification of drivers as
`
`employees for purposes of paid sick time only.
`
`A. Background
`
`1. Lyft, Inc., and Drivers
`
`Lyft is a company that enables riders to obtain transportation to certain destinations.
`
`Ayanbule Decl. ¶ 2 [#18]. Riders arrange a ride through Lyft’s mobile phone application (“App”)
`
`and indicate where they want a driver to pick them up. Sholley Decl. ¶ 5 [#132]. Lyft offers the
`
`
`
`10
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 11 of 28
`
`ride to available drivers in the same geographic area and a driver accepts the ride through the
`
`App. Id. ¶¶ 5, 7.
`
`To drive for Lyft, a potential driver must agree to Lyft’s Terms of Service (the “Terms”).
`
`Terms 1 [#18-1]. In agreeing to the Terms, the driver affirms that, among other requirements, he
`
`or she owns, or has the legal right to operate the vehicle in which the driver will transport
`
`customers. Id. § 10(b). A potential driver must also pass Lyft’s driver screening, which includes
`
`a driving history and criminal background check, along with any other state-specific
`
`requirements. Sholley Decl. ¶ 6 [#132]. Drivers submit their driver’s license, social security
`
`number, and vehicle insurance information which Lyft then checks. Tucker Decl. ¶ 18(iii) n.21
`
`[#133]. Lyft runs periodic background checks on drivers and will deactivate drivers with
`
`disqualifying criminal convictions. Id.
`
`Once Lyft activates drivers, they can accept rides. However, drivers may not accept street
`
`hails, charge additional amounts for rides, or allow passengers to pay in cash or through a credit
`
`card reader. Terms §§ 4, 10(e) [#18-1]. Lyft tracks a driver’s location when the App is on and, if
`
`given permission, when the App is off. Id. at § 2(B).
`
`Lyft states that it “generate[s] substantially all of [its] revenue from [its] ridesharing
`
`marketplace that connects drivers and riders.” Tucker Decl. ¶ 33 n.39 [#133] (quoting Lyft Form
`
`S-1 Registration Statement (March 1, 2019)). The company unilaterally sets fares, and at times
`
`changes the pricing structure. Id. at ¶¶ 47-48 [#133]; 2019 Lyft and Uber Driver Survey 40
`
`[#130-2] (stating that Lyft’s president emailed drivers after fare cuts to explain why the company
`
`made cuts). The company also collects riders’ fares, including both “variable fares” based on
`
`duration and distance of a ride, and “quoted fares” that are fixed by Lyft through the App. Terms
`
`§ 4 [#18-1]. After the ride is complete, the rider pays Lyft through the App. Sholley Decl. ¶ 5
`
`
`
`11
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 12 of 28
`
`[#132]; Tucker Decl. ¶ 18(iv) n.24 [#133]. Lyft retains a portion of these fares, designating these
`
`amounts as fees and commissions, charging “service fees” for each ride, and “prime time” fees
`
`for rides at peak hours. Terms § 4 [#18-1]; Tucker Decl. ¶ 33 [#133]. Lyft does not pay drivers
`
`instantaneously when Lyft is paid by the rider unless the driver accepts a “Lyft Direct” debit card
`
`and an associated bank account. Tucker Decl. ¶ 18(iv) n.25 [#133].
`
`Between October 2018 and October 2019, approximately 57,000 drivers drove for Lyft in
`
`Massachusetts, providing rides to over two million passengers. Sholley Decl. ¶ 11 [#132]. Lyft
`
`drivers made, on average nationwide in 2019, $17.49 per hour before expenses, and $11.55 per
`
`hour after expenses. 2019 Lyft and Uber Driver Survey 6 [#130-2]. Drivers may drive as much
`
`or as little as they want on their own schedule and may reject ride requests. Tucker Decl. ¶ 22
`
`[#133]. However, Lyft retains the right to deactivate drivers who violate the Terms or who fall
`
`below Lyft’s “star rating or cancellation threshold.” Terms § 16 [#18-1]. According to
`
`Defendants’ random sample of Massachusetts drivers, 59% of drivers work less than 90 hours
`
`annually and only 2.6% of drivers drive over 30 hours per week. Crandall Decl. ¶¶ 12, 18 [#134].
`
`To meet demand – and to incentivize drivers to drive more -- Lyft offers bonuses for drivers who
`
`work in “Personal Power Zones,” where demand is high, and uses other bonus mechanisms.
`
`Tucker Decl. ¶ 28 [#133]; 2019 Lyft and Uber Driver Survey 4 [#130-2].
`
`Lyft considers its drivers to be “independent contractors,” and does not provide them sick
`
`leave benefits. Terms § 19 [#18-1]; Woodley Decl. ¶ 11 [#138].
`
`
`
`The COVID-19 pandemic has affected Lyft’s operations. The company has stated that no
`
`one should use ridesharing if they suspect they have or may have COVID-19, reminded drivers
`
`and riders of hygiene practices, provided hand sanitizer and cleaning wipes to drivers, suspended
`
`its “Shared rides” option which allowed riders to share a ride with other riders, and publicly
`
`
`
`12
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 13 of 28
`
`stated that if Lyft is notified of a driver or rider who tests positive, the individual will not be
`
`permitted to use the Lyft App until medically cleared. Westbrock Decl. ¶¶ 5-6 [#131]. The
`
`company does not provide paid time off for drivers who do not want to drive during the
`
`pandemic but has told drivers that Lyft has developed a fund to support drivers who test positive
`
`for COVID-19. Moyer Decl. ¶ 11 [#136].
`
`As a result of the danger posed by the disease, some drivers have chosen to stop driving
`
`entirely. See Prunier Decl. ¶ 7 [#137]. Two of the Plaintiffs report that they felt sick after picking
`
`up riders who had attended a Biogen conference in Boston, where a number of people were
`
`infected with coronavirus, and after picking up riders at the airport. El Koussa Decl. ¶¶ 5-6 [#90-
`
`1]; Leonidas Decl. ¶ 6 [#90-2]. Both drivers continued to drive despite feeling sick because they
`
`needed income to pay their living expenses. El Koussa Decl. ¶ 7 [#90-1]; Leonidas Decl. ¶¶ 7-8
`
`[#90-2]. Both drivers also feared being deactivated if they cancelled too many rides. El Koussa
`
`Decl. ¶ 6 [#90-1]; Leonidas Decl. ¶ 7 [#90-2].
`
` Drivers report much lower demand for rides during the pandemic. Moyer Decl. ¶ 9
`
`[#136]; Leonidas Decl. ¶ 11 [#90-2].
`
`2. Massachusetts Earned Sick Time Law
`
`Under the Massachusetts Earned Sick Time Law, M.G.L. c. 149, § 148C, employers with
`
`eleven or more workers must provide paid sick time to employees.5 Employees earn sick leave at
`
`a rate of one hour for every thirty hours worked and may earn up to forty hours of leave per year,
`
`
`5 Section 148C(a) defines an “employee” as “any person who performs services for an employer
`for wage, remuneration, or other compensation . . . .” and an employer as “any individual,
`corporation, partnership or other private or public entity, including any agent thereof, who
`engages the services of an employee for wages, remuneration or other compensation.” As
`discussed below, M.G.L. c. 149, § 148B (the “Independent Contractor Law”) provides a further
`definition of who is considered an employee for the purposes of Chapter 149, including § 148C.
`
`
`
`13
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 14 of 28
`
`but may not use their leave until after 90 days of employment. Id. at §§ 148C(d)(1, 4). Sick time
`
`is paid at the employee’s regular rate of pay. M.G.L. c. 149, § 148C(a). An employee may use
`
`sick time to 1) care for a child, spouse, parent, or parent of a spouse, who is suffering from a
`
`physical or mental illness or other qualifying medical issue; 2) care for their own physical or
`
`mental illness or qualifying medical issue; 3) attend a medical appointment for themselves or
`
`their child, spouse, parent, or parent of a spouse, or 4) address the health effects of domestic
`
`violence. Id. at § 148C(c). Part-time, seasonal, and temporary employees all qualify to earn sick
`
`time under the statute. 940 CMR § 33.02. Employers are required to keep accurate records of
`
`employees’ accrual and use of earned sick time, and the Attorney General may inspect those
`
`records to ensure compliance. 940 CMR §§ 33.09(1, 2).
`
`3. Federal Legislation Relating to COVID-19 Pandemic
`
`In response to COVID-19, Congress has passed two statutes with provisions intended to
`
`provide economic relief to workers during the pandemic. Under the Families First Coronavirus
`
`Response Act (“FFCRA”), eligible self-employed individuals may receive tax credits in an
`
`amount equal to the individual’s “qualified sick leave equivalent amount.” Pub. L. No. 116-127,
`
`§ 7002(a), 134 Stat. 178, 212 (2020). An eligible self-employed individual is defined as an
`
`individual who “regularly carries on any trade or business within the meaning of section 1402”
`
`of the Internal Revenue Code of 1986, and “would be entitled to receive paid leave during the
`
`taxable year pursuant to the Emergency Paid Sick Leave Act if the individual were an employee
`
`of an employer (other than himself or herself).” Id. at § 7002(b), 134 Stat. at 212. The qualified
`
`sick leave equivalent amount equals the number of days during the taxable year that the
`
`individual is unable to perform services (up to a maximum of ten days), multiplied by the lesser
`
`of $511 or 100% of regular pay if the individual is unable to work because he or she is subject to
`
`
`
`14
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 15 of 28
`
`a quarantine or isolation order, has been advised to self-quarantine, or is experiencing COVID-
`
`19 symptoms and is seeking a medical diagnosis, or by the lesser of $200 or 67% of regular pay
`
`if the individual is unable to work in order to care for an individual for a covered reason. Id. at
`
`§ 7002(c)(1), 134 Stat. 212-13. In addition, the Act makes family leave tax credits equivalent to
`
`up to 50 days of leave available to self-employed workers. Id. at § 7004(c)(1)(A), 134 Stat. at
`
`217. The FFCRA sunsets on December 31, 2020. Id. § 5108, 134 Stat. at 198.
`
`The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) also provides
`
`economic assistance to self-employed workers. Pub. L. No. 116-136, 134 Stat. 281 (2020). The
`
`statute created the Federal Pandemic Unemployment Assistance (“PUA”) program, which
`
`provides unemployment assistance through state agencies to “individual[s] who . . .[are] not
`
`eligible for regular [unemployment] compensation or extended benefits.” Id. at
`
`§ 2102(a)(3)(A)(i), 134 Stat. at 313. To receive benefits, individuals must self-certify they are
`
`capable of working, but are unable to work because, among other reasons, 1) they or a family
`
`member have been diagnosed with COVID-19; 2) they are under a quarantine order; 3) the
`
`individual has quit their job due to COVID-19; or 4) their place of employment is closed due to
`
`COVID-19. Id. at §§ 2102(a)(3)(A)(ii)(I, II), 134 Stat. at 313-14. Once approved, workers may
`
`receive up to 39 weeks of benefits for weeks of unemployment between January 27, 2020, and
`
`December 31, 2020. Id. at § 2102(c)(2), 134 Stat. at 315. In addition, the Act allows self-
`
`employed workers to apply for Paycheck Protection Program loans. Id. at § 1102(a)(2), 134 Stat.
`
`at 286-293.
`
`Massachusetts has now set up the PUA program for self-employed workers in the state.
`
`See Pandemic Unemployment Assistance Benefits Brochure [#158-4]. In addition to the reasons
`
`listed in the CARES Act for eligibility, a self-employed worker qualifies under the program for
`
`
`
`15
`
`

`

`Case 1:19-cv-11974-IT Document 174 Filed 05/22/20 Page 16 of 28
`
`benefits if he or she “works as an independent contractor and the COVID-19 public health
`
`emergency has severely limited his or her ability to continue performing his or her usual work
`
`activities, and has thereby forced the individual to stop performing those activities.” Id. at 4.
`
`PU