Decided - The FindLaw Noteworthy Decisions and Settlements Blog

Uber Wins 9th Circuit Case: Drivers Can't Bring Class Action

Based on the U.S. Supreme Court's recent ruling in Epic Systems Corp. v. Lewis, a Ninth Circuit panel had no choice but to unanimously overrule a lower court's decision, forcing most Uber drivers to resolve their matter of Employee vs Independent Contractor in arbitration, and thereby decertifying the class action brought by the Uber drivers.

Uber Driver Class Action Originally Certified

Drivers are hired by Uber as independent contractors, not employees. They sign an agreement that has an arbitration clause in it. Most of those drivers do not counter-offer to get out of the arbitration clause, fearing that doing so would risk losing the job. Many Uber drivers are now suing Uber, claiming that this "independent contractor" status is a misclassification, based on their job requirements, and they want to be reclassified as employees.

This reclassification would allow the Uber drivers to be reimbursed for gasoline, vehicle maintenance, earn minimum wage and overtime, and let them keep tips. Since there were so many suing, the drivers decided to form a class action to minimize cost and effort, and maximize results. The lower court certified the class action, and allowed the suit to proceed in legal courts, rather than arbitration, because the lead plaintiff in the class action had opted out of arbitration in the original employment agreement.

Ninth Circuit Panel Decertifies Class, Remands to Arbitration

Uber appealed, knowing that there was another case pending in the United States Supreme Court that could force the Ninth Circuit to overturn this lower court finding and require Uber drivers that did not opt-out to go through arbitration rather than the courts.

Uber was right. In a 5-4 decision in May 2018, SCOTUS ruled in Epic that companies can compel workers to waive their right to class actions and instead pursue arbitration individually for various workplace disputes, without violating current labor laws. Once Uber cited Epic, the panel had no choice but to agree, and the class was summarily decertified, and the matter sent to arbitration. It is possible that at arbitration, the class could get re-certified, but only for those drivers that negotiated out of that contract clause.

The Fight for Employment Status Rages On

The fight over Employee vs. Independent Contractor is not over, but the drivers' case is wounded. Drivers will now be forced to settle their claims via arbitration one by one. And there are thousands of drivers that joined the class action. However, plaintiffs' attorneys are not deterred. "If Uber wants to resolve these disputes one by one, we are ready to do that -- one by one," said attorney Shannon Liss-Riordan.

If you feel that you have been classified as an independent contractor but believe you are working and treated as an employee, contact an employment lawyer. The law may be on your side, and afford you benefits and earnings you may not currently receive.

Related Resources: