Munger, Tolles & Olson Advises Handy in Resolution of District Attorney Litigation

Munger, Tolles & Olson represented Handy in resolving litigation brought by the San Francisco and Los Angeles County District Attorneys alleging the misclassification of its “Pros” in California.

Following two years of litigation, on the eve of trial, Handy and the district attorneys reached a tentative settlement that was later approved this month by the court. Under the settlement, Handy is permitted to continue its existing business model with some changes in how the app works, including how service providers claim jobs and negotiate rates.  

The lawsuit, filed in 2021, alleged Handy misclassified tens of thousands of home service providers, or “Pros,” as independent contractors in California. The case was one of the first in which the interpretation of Labor Code Section 2777, governing referral agencies, was being litigated. 

Shortly after the lawsuit was filed, MTO defeated the district attorneys request for a preliminary injunction seeking to reclassifying home service providers as employees. The court agreed with MTO’s argument that a preliminary injunction would not benefit home service providers, marking the first defeat of a government agency’s request for preliminary injunction under recently enacted AB5.

The MTO team was led by Rohit Singla and included Malcolm Heinicke, Erin Cox, Justin Raphael, Juliana Yee, Benjamin Barokh and Paul Martin.