Uber gets a legal win in drivers’ suit
Uber won a victory Tuesday in a longrunning legal battle with drivers over the nature of their relationship with the ridehailing company that largely controls their working days.
The U.S. Court of Appeals for the Ninth Circuit in San Francisco on Tuesday ruled that drivers pursuing a class-action lawsuit against Uber alleging the company incorrectly classified them as contractors instead of employees cannot proceed because such matters must be resolved through individual arbitration claims.
The drivers filed the lawsuit, O’Connor vs. Uber, in 2013, accusing the company of misclassifying drivers to avoid reimbursing them for gas and vehicle maintenance. The suit sought class-action status on behalf of 160,000 Uber drivers in California. A federal judge in 2015 granted class-action status, and the following year, Uber and the drivers nearly reached a $100 million settlement. That settlement, however, was rejected by the judge overseeing the case.
Tuesday’s ruling does not address whether the drivers’ claims about being misclassified have any merit; it merely says the claims cannot proceed as a class-action lawsuit because the drivers had signed arbitration agreements
waiving their right to a class action.
“Whether these workers are employees or independent contractors is still very much up in the air,” said Dan Handman, an attorney at the law firm Hirschfeld Kraemer who represents companies in class-action lawsuits and is not involved in Uber cases.
Now, if the drivers wish to pursue these claims, they must file them individually against Uber, and the cases would proceed in arbitration rather than the court system.
An Uber spokesman said the company is pleased with the court’s ruling.
Shannon Liss-Riordan, the attorney representing Uber drivers, said she is considering appealing the decision to the full Ninth Circuit, since Tuesday’s ruling was decided by a three-judge panel.
“We have, unfortunately, been long expecting this,” Liss-Riordan said. “If Uber wants to resolve these disputes one by one, we are ready to do that.”
The ruling also prevents three other cases against Uber from proceeding as class actions. Those cases involve drivers seeking to recover tips, wages and overtime pay they say are owed.
Uber drivers “are probably unhappy” with the decision, said Oakland attorney Steve Tindall, a partner at Girard Law Group who represents workers in employment class-action lawsuits and is not involved in the Uber cases.
“Instead of sitting back and waiting to see if this case settles, now, in order to get a resolution for your claims, you might have to individually take action,” he said. “And that takes time. And it depends on the value of those claims and how motivated the individual employees are.”
A recent case decided by the California Supreme Court could work in favor of Uber drivers, if they choose to pursue individual claims. In the case, Dynamex Operations West, Inc. vs. Superior Court of Los Angeles, the court in April ruled that if a company has hired workers to perform the core function of the company’s services, those workers are likely employees, not independent contractors.