Judge in Uber Case Rules on Arbitration Agreements


San Francisco, CA: Plaintiffs in the Uber misclassification lawsuit have been handed another victory in their litigation against the ridesharing company. The judge in the lawsuit has ruled against Uber’s arbitration agreement, setting the stage for thousands more plaintiffs to join the lawsuit.

US District Judge Edward Chen ruled Uber’s arbitration agreement was not enforceable, meaning drivers who signed it are eligible to join a class-action lawsuit against the ridesharing company after all. In September, Judge Chen granted plaintiffs class-action status, although at the time the class did not include drivers who signed Uber’s arbitration agreement.

In December, however, Judge Chen ruled on the arbitration agreements, finding them unenforceable as a matter of public policy. Judge Chen found that the 2014 and 2015 arbitration agreements “contain a non-severable PAGA [Private Attorney General Act] waiver, rendering the entire arbitration agreement also unenforceable.” As a result, UberBlack, UberX and UberSUV drivers will now be eligible to join the lawsuit if they signed up under their individual name, even if they did not opt out of the arbitration agreement.

In addition to ruling on the arbitration agreements, Judge Chen also ruled class members could pursue claims linked to work expenses, including vehicle and phone expenses.

Uber has appealed the decision.

The lawsuit was initially filed by Uber drivers who claimed they were misclassified as independent contractors even though Uber reportedly treated them like employees. Because they were classified as independent contractors, they were not eligible for certain protections, including overtime, sick days and health insurance.

Some employers require workers to sign arbitration agreements, which essentially waive an employee’s right to file a lawsuit to settle disputes such as wrongful termination and wage complaints. Instead, employees are forced to go through an arbitration process to resolve any claims. Arbitration cases have different rules about sharing information between claimants and defendants than court processes and usually do not allow for appeals.

Up to 160,000 drivers could now be included in the class against Uber, although some drivers are still excluded. The ruling also shows that not all arbitration agreements are enforceable and the courts may still be required to make judgments on the legitimacy of individual agreements.

The lawsuit is O’Connor et al. v. Uber Technologies Inc. et al., case number 3:13-cv-03826, US District Court for the Northern District of California.

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