Posted on December 21, 2018 in Arbitration
In effort to have their employment status reclassified from independent contractor to employee, a group of Uber drivers filed a class action lawsuit against the ride sharing company. The drivers claimed they were misclassified based on their job requirements. Ultimately, the Ninth Circuit panel overruled a lower court’s decision and decertified the class, meaning any Uber drivers who wish to continue to pursue legal action will be required to do so individually through arbitration.
All Uber drivers are hired as independent contractors. As a result, they are not reimbursed for items such as gasoline or vehicle maintenance, and they do not receive benefits or overtime pay. Uber’s employment agreement includes an arbitration clause, which states that the driver must pursue any legal claims against the employer through arbitration, as opposed to filing a lawsuit. Very few drivers attempt to contest the arbitration clause because they do not want to lose their job, or jeopardize their chances of being hired. However, a growing number of Uber drivers feel that the independent contractor classification is unfair and that they should be reclassified as employees.
Due to the number of Uber drivers who were pursuing legal action against the ride sharing company, they decided to consolidate their efforts and pursue a class action lawsuit. Ideally, this would save each driver time and money, while resulting in the best possible outcome for each driver. The class action was certified by the lower court and it proceeded in the court system. However, Uber appealed the ruling because they were aware of another case that was pending in the United States Supreme Court that could overturn the Ninth Circuit’s ruling. In Epic Systems Corp. v. Lewis, the Supreme Court ruled in favor of the company by upholding individual arbitration clauses, which in this case meant that ride sharing companies could require workers to waive their right to class actions and pursue arbitration instead. After the Superior Court’s ruling, the Ninth Circuit had no choice but to decertify the class action brought by the Uber drivers and send it to arbitration.