WASHINGTON -- A federal appeals court Tuesday ruled that Uber can force its drivers into individual arbitration over pay and benefit disputes, voiding an effort by thousands of drivers to join in a class-action suit against the ride-hailing company.
The unanimous decision by a three-judge panel of the U.S. 9th Circuit Court of Appeals in San Francisco overturned a lower-court order that had certified the drivers' class-action effort.
In the ruling Tuesday, U.S. Circuit Judge Richard R. Clifton cited a 5-4 U.S. Supreme Court decision in May that employers could enforce so-called individual arbitration agreements that require workers to give up the ability to collectively pursue claims that they were shortchanged or treated unfairly.
Uber said in a statement that it was "pleased with the court's decision."
But the legal dispute over how workers are classified in the so-called gig economy is complex and Tuesday's decision might not be the end.
In addition to a potential appeal, the California Supreme Court weighed in this spring with a ruling that made it harder for employers to classify their workers as independent contractors. That could be a factor if Uber drivers take their cases to arbitration.
Current and former Uber drivers had filed suits starting in 2013 against the San Francisco company, saying it had misclassified them as independent contractors instead of employees. The classification means that drivers are responsible for their own work-related expenses such as gas, car repairs and insurance.
The drivers wanted to join together to sue Uber over the classification. But Uber said that they had to pursue their claims separately in individual arbitration cases. U.S. District Judge Edward Chen in San Francisco certified the class-action effort in 2015.
Shannon Liss-Riordan, a lawyer for the drivers, said Tuesday's decision was expected given the earlier Supreme Court ruling and they were considering an appeal to the full 9th Circuit.
Eve Wagner, a mediator and arbitrator who has practiced employment law for 30 years, called the 9th Circuit decision "a staggering blow" to the drivers and their lawyers.
"It is much easier to have a class action than to have thousands of individual arbitrations," she said.
Some drivers who were part of the class may simply decide not to pursue the claims, Wagner said.
In a class action, most of the work is done by a few workers who represent the class. Now individuals will have to take a more pro-active role if they want to press their claims, she said.
The California Supreme Court ruling in April said that in order to classify a worker as an independent contractor, businesses must show that the worker is free from the control and direction of the employer; performs work that is outside the hirer's core business; and customarily engages in "an independently established trade, occupation or business."
But that ruling applied to issues such as minimum wage, overtime and rest breaks. It does not apply to the work-related expense disputes at the heart of the federal case.
Business on 09/26/2018