Earlier this month, Judge Edward M. Chen of the Federal District Court of San Francisco made his final order certifying a case brought by Uber drivers as a class action. This decision was a major victory for the drivers because Uber’s arbitration clause was found to be unenforceable. As a result, people who drove for Uber since 2014 and were subject to the arbitration clause were added back into the class.
Only days after Judge Chen’s order expanding the class, Uber issued a new driver partner agreement to Uber drivers with a revised arbitration clause designed to restrict people who sign it from benefitting from this or other future class actions. To continue working for Uber, drivers have to sign the agreement. However, if they email email@example.com within 30 days after signing they can opt out.
Shannon Liss-Riordan, counsel for the Uber drivers, told the Los Angeles Times that the new agreement was clearly an attempt by Uber to limit the class size and that her firm is working on a motion to ask the court to block the new agreement.
“We believe this is an illegal attempt by Uber to usurp the court’s role now in overseeing the process of who is included in the class,” she said.
Also see: “When is a worker an independent contractor?”
James R. Evans, a partner in the Los Angeles firm Allston and Bird, LLP says there are dozens of companies in the sharing economy that could be affected by the outcome of the Uber class action. “Any company that is using outsourced labor has the potential for liability as an employer,” he says. “You may not think you are the employer if you hire a janitorial service to come in and clean up your hardware store, but the true nature of the relationship depends on the degree of control you have over the work and the worker.”
Uber drivers are suing the company for a determination that they are employees and not independent contractors, as currently classified by the company. Specifically, they brought claims for expense reimbursement and converted tips under the California Labor Code.
“I brought the case under California law as a nationwide class action. At first the judge agreed but a year later he narrowed the case to California, which is a ruling I can still appeal at the end of the case if we are successful under California law for California drivers,” says Liss-Riordan.
On the Uber lawsuit website, Liss-Riordan also notes that Uber is attempting to appeal the most recent ruling striking the arbitration clause. “In the event that drivers will need to file individual arbitrations, we are keeping a list of drivers who are interested in bringing claims individually,” she says.
It is still unclear how many drivers will be covered by the class, but it is expected many thousands more are eligible (increasing the total to as many as 160,000) as a result of the most recent ruling. However, drivers who registered to drive for Uber under a company name or through a third party (like a limousine company) are still excluded.
In June the California Labor Commissioner ruled that an Uber driver was indeed an employee, not an independent contractor, and ordered Uber to reimburse the driver for her expenses. However, Uber has appealed the decision, which will be reviewed de novo in court, and so the driver who won the case has not yet received reimbursement and will have to await the outcome of court proceedings. The remedy ordered by the California Labor Commissioner is the same remedy all Uber drivers are asking for in the class action lawsuit.
In addition to the decision by the California Labor Commissioner, the California Unemployment Insurance Appeals Board has ruled that an Uber driver is an employee eligible to obtain unemployment benefits. Similarly, the Bureau of Labor and Industries of the State of Oregon issued an advisory opinion in October that Uber drivers are employees.
Liss-Riordan is also counsel for plaintiffs in class action suits against several sharing-economy companies DoorDash, Caviar and Lyft.
Sheryl Smolkin is a lawyer and freelance writer based in Toronto.
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