San Francisco and Los Angeles sued Handy.com, which provides home services, on Wednesday for incorrectly classifying household cleaners and hand types as independent contractors rather than employees.
“We can not allow companies like Handy to illegally classify employees as independent contractors to save costs or deprive workers of legal protection,” said Chesa Boudin, San Francisco District Attorney, who co-chaired the case with the Los Angeles District Attorney. George Gascón, filed. “All Californians are harmed if companies break the law, exploit their employees and systematically misclassify.”
Handy said the suit has no merit. “This is based on a fundamental misunderstanding between the law and the rights of Handy and the Pros who use the service,” the company said in a statement. “Handy complies with all laws and regulations in California and elsewhere, and we will vigorously defend ourselves in court.”
According to Crunchbase, the New York company, founded in 2012, supported $ 110.7 million in venture capital. Handy was acquired in 2018 at an unknown price by ANGI Homeservices, the parent company of Angie’s List and HomeAdvisor.
The lawsuit, filed in the San Francisco Superior Court, says Handy violates AB5, California’s trademark law for workshops, making it harder for businesses to claim workers are contractors, as well as Dynamex, a Supreme Court ruling in the state.
“The incorrect classification of workers as independent contractors instead of employees leaves them without important workplace protection, such as the right to a minimum wage; access to paid sick leave; disability insurance; and unemployment insurance, ”reads the lawsuit.
According to Boudin, Handy controls its workers, including rates and invoices. “It has all the hallmarks of an employer-employee arrangement,” he said. “It’s not a referral service for true independent contractors who set their own rates and collect fees from people they work for.”
The case is seeking civil fines, restitution for workers in California, and reclassification of workers here as employees.
Handy has about 9,000 cleaners and hand types in the Bay, Boudin said, as well as about 13,400 in Los Angeles and 4,900 in San Diego. “All in all, we are talking about tens of thousands of people who we claim are wrongly classified,” he said.
Boudin is also suing food delivery company DoorDash over the misclassification of employees under AB5, while the California Attorney General’s Office and the city attorneys of San Francisco, Los Angeles and San Diego are suing Uber and Lyft over the same case.
In these cases, there are fines and restitution for the past, but they can no longer strive to reclassify workers as employees due to Proposition 22, a voting measure passed in November that keeps app-based couriers and managers as independent contractors. Gig companies are so concerned that they have to treat workers as employees that they have spent more than $ 220 million to Prop. 22 to pass.
Plug. 22 applies only to ride-sharing services and delivery companies. This does not apply to Handy, and therefore there are no legal barriers to forcing the workers into employees.
Handy was the focus of several legal actions regarding misconduct of workers as well as harassment at work, even according to legislation that preceded AB5. Like many companies, the concert workers agreed to arbitration, which helps keep cases out of court.
Handy’s arbitration agreements will not prevent the government case from going to court against it, Boudin said.
Shannon Liss-Riordan, a Boston lawyer who has sued numerous gig companies over the status of workers, has a nationwide case against Handy that has been forced into arbitration. She appeals it in hopes of getting a court date.
Byron Goldstein, an attorney from Oakland, filed a lawsuit against Handy in 2014. It was decided in 2017 by arbitration. Handy paid $ 1.2 million to compensate California employees while denying any wrongdoing.
“We thought it was a strong case for subdivision,” he said Tuesday. “But arbitration agreements have in many cases isolated companies against the law.”
Vilma Zenelaj, a plaintiff in the Goldstein case, who at the time worked as a cleaner for Handy in Los Angeles, told The Chronicle at the time that she felt she was being treated like an employee, without any benefits from work.
“You had to wear their T-shirt,” she said. ‘You must greet the customers with’ Hello, I’m Vilma from Handybook (the former name of the company); should I take off my shoes? ‘You had to ask a customer how to use the toilet. It was a very controlling situation. ”
Carolyn Said is a staff writer for the San Francisco Chronicle. Email: [email protected] Twitter: @csaid