A federal judge has dispatched to arbitration a lawsuit brought against ride-hailing service Lyft by a group of former drivers who claim other drivers harassed and intimidated them, leading to retaliation and termination from Lyft when they filed police reports.

In an opinion issued Feb. 15 in Chicago, U.S. District Judge Samuel Der-Yeghiayan granted the ride sharing service’s motion to dismiss and compel arbitration, saying the drivers’ contracts with Lyft required such an outcome.

L. Steven Platt
L. Steven Platt | Robbins Salomon & Patt Ltd.

The drivers in question say they were top-rated participants in Lyft’s Ambassador program, but in 2016 began to experience problems with some of the company’s other drivers — also party to the complaint as individual defendants — including threatening behavior like being approached in their vehicles by people on foot, as well as other forms of intimidation and verbal harassment.

Further, the other drivers allegedly attempted to intercept customers and dissuade them from taking rides from the plaintiffs, including by spreading false rumors, and at times surrounded plaintiffs’ vehicles. The plaintiffs said they reported this conduct to police and complained to Lyft, but alleged the company did nothing to prevent future harassment.

Instead, the drivers contended, Lyft retaliated against them for filing police reports by causing their electronic equipment to malfunction and manipulating data to reduce their earnings before ultimately deactivating all their Lyft accounts. Their complaint alleged breach of contract, tortious interference with prospective economic advantage, wrongful suspension and discharge, assault, defamation, conspiracy and violations of the Illinois Whistleblower Act, Illinois Wage Payment Collection Act and federal Fair Labor Standards Act.

Against the individual driver defendants, the plaintiffs alleged violation of the Illinois Stalking Act. Lyft moved to dismiss and compel arbitration, while the individual defendants sought to have the complaint dismissed.

In its motion, Lyft said all its drivers agree to have disputes resolved via arbitration when they consent to the user terms in the Lyft app, and again when agreeing to terms involved with becoming a Lyft Ambassador. The plaintiffs, according to Der-Yeghiayan, did not dispute they agreed to either set of conditions, but said such arbitration clauses are unenforceable because they were Lyft employees.

Lyft said drivers Beth Bingsbury and Jill Koenig accepted user terms in 2014, while driver Savannah Williams agreed to the 2016 version.

In support of their position, the plaintiffs cited a 2016 decision from the U.S. Seventh Circuit Court of Appeals in Lewis v. Epic Sys. Corp., arguing an arbitration clause requiring individual employees to waive rights to pursue class action and collective bargaining claims violated the National Labor Relations Act.

However, Lyft maintained its drivers are independent contractors, a position Der-Yeghiayan said the plaintiffs could argue during arbitration. He cited two 2017 U.S. District Court decisions in Chicago, Ali v. Vehi-Ship LLC, and Olivares v. Uber Techs Inc., stipulating that if a dispute falls within the scope of an arbitration clause, the arbitrator is empowered to determine whether the workers in question are employees or independent contractors, as well as determine if an NLRA violation has been committed.

Although Der-Yeghiayan agreed the court has discretion to stay an action pending the result of arbitration, he asserted the right to dismiss:

“In order to prevent this case from stagnating on the court docket,” Der-Yeghiayan wrote, “the instant action is dismissed with leave to reinstate after the conclusion of the arbitration proceedings.”

However, the judge denied the defendant drivers’ motion to dismiss the claims they faced from their plaintiff counterparts.

The plaintiff drivers are represented by attorneys L. Steven Platt and Christine R. Frymire, of the firm of Robbins, Salomon and Patt Ltd., of Chicago.

Lyft is defended by attorneys Noah A. Finkel, Kyle Anne Petersen and Thomas M. Horan, of the firm of Seyfarth Shaw LLP, of Chicago.

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Seyfarth Shaw, LLP U.S. District Court for the Northern District of Illinois

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