Successful settlement that alleged Handy Technologies Inc., a company that offers in-house services through an app, violated AB 5 by not correctly classifying its workers will ensure workers are not improperly classified moving forward.
San Francisco, CA – Today, San Francisco District Attorney Brooke Jenkins announced that Handy Technologies, Inc., a company that offers in-house services through an app, has agreed to pay $6 million and enter into a permanent injunction to settle a worker protection lawsuit. The San Francisco District Attorney’s Office and Los Angeles District Attorney’s Office alleged that Handy unlawfully misclassified workers as independent contractors rather than employees in violation of California’s employment classification laws, including State Assembly Bill 5 (2019).
“This settlement is not only a victory for the California workers who were misclassified by Handy Technologies, Inc., but also a warning to other companies that engage in similar unlawful behavior,” said San Francisco District Attorney Brooke Jenkins. “This behavior by corporations will not be tolerated as workers are being harmed, taxpayers are burdened with paying the costs of these companies’ legal responsibilities, and law-abiding businesses are forced to compete on an unlevel playing field.”
“This judgment is a long-awaited triumph for workers who have been unjustly treated as independent contractors, stripped of their right to healthcare, paid leave and unemployment insurance,” said Los Angeles County District Attorney George Gascón. “The ruling signifies a milestone in the fight for workers’ rights, as Handy is now compelled to make sweeping and specific changes to their business practices, granting workers greater autonomy and control over their work. I must commend the tireless efforts of my colleagues in the San Francisco District Attorney’s Office and our team of prosecutors who have relentlessly pursued justice for these workers. We will not rest until justice is served for every worker who has been exploited or mistreated and we will continue to hold companies accountable for their actions.”
Handy refers to the workers who perform the cleaning and handyman services requested by customers as “Pros.” As part of the judgment, which was recently filed in San Francisco Superior Court, Handy must pay $4.8 million in restitution to workers, which will cover over 25,000 California Pros who worked during the period of March 2017 to May 2023. Handy must also pay a civil penalty of $1.2 million for its unlawful practices.
With respect to Handy’s future treatment of Pros, Handy has agreed to a permanent injunction that will safeguard Pros from ongoing misclassification. In resolving this matter, Handy has made substantial changes to its business operations in order to no longer run afoul of California’s classification laws. These changes include that Pros can now set their own hourly pay rates and, after claiming jobs, Pros are now able to immediately contact customers to learn more about the requested service and negotiate its terms (like hours and pay) without being contractually bound to perform the work or penalized by Handy for rejecting the job.
“We are pleased to get both restitution for workers and a permanent injunction to ensure compliance with the law,” said Assistant District Attorney Scott Stillman. “Lawsuits like this one help ensure California workers are treated fairly and with dignity.”
As alleged in the case, for the period of time that Handy illegally misclassified Pros as independent contractors instead of employees, these workers were deprived of workplace benefits to which they were entitled. In the coming months, a claims administrator will ensure that California Pros who are eligible for restitution receive their respective distribution from the restitution funds.
Assistant District Attorney Stillman leads the office’s Workers’ Rights Unit and was supported in this case by Assistant District Attorney Angela Fisher and Paralegal Chloe Mosqueda, under the supervision of Assistant Chief District Attorney Matthew McCarthy of the White Collar Crime Division.
The Workers’ Rights Unit of the San Francisco District Attorney’s Office investigates and prosecutes legal violations committed by employers against workers. This innovative unit, one of the first of its kind in the nation, focuses on civil enforcement of workplace law through California’s Unfair Competition Law as well as crimes such as wage theft and labor trafficking.
Court Number: CGC-21-590442