Victory For Uber
Sources claim that Uber has come out victorious in a legal case between it and its drivers. This victory comes as a Federal Appeal Court held that drivers who want to be considered as employees and not independent contracts are expected to individually resort to arbitration for their claims and they are not supposed to come under a class action.
The decision was three to nil and the Ninth U.S. Circuit Appeal Court reversed the decision of a lower court. The judge of the lower court had denied Uber’s motion to compel its drivers to submit to arbitration in three different lawsuits.
The court further overturned the class certification in one of the lawsuits by several California drivers who had been working with Uber since 2009.
The drivers’ complaint was that Uber classified them not as employees but as independent contractors so it could avoid the duty to reimburse the drivers for vehicle maintenance, gasoline and any other expense they would normally have to pay to employees.
Some drivers also accused the ride-hailing company of refusing to allow them to keep all the tips gotten from their passengers. The class action reportedly consisted of two variants of a claim.
Simply, class actions allow people to institute an action together as a body and it also offers the potential to get more recoveries as compared to when they have to sue individually. Suing individually often proves to be very expensive.
The ride-hailing company’s defense was boosted after the Supreme Court in the case between Epic Systems Corp and Lewis in May ruled five to four that companies were free to compel workers into waiving the right they had to class actions. It also held that they could put an option for arbitration in case of a workplace dispute.
In this recent decision, Judge Clifton stated that arbitration was a necessity based on the ruling in the Epic’s case and another ruling of the ninth circuit in 2016 in a case that was also against Uber.
A counsel for the drivers, Shannon Liss-Riordan, stated that the court’s overturning the driver’s request for class action was an expected move. Liss-Riordan may go before an appellate court panel comprising of 11 judges to look into the case again, but she said several drivers are currently going with the individual arbitration option. She added that if the company prefers to settle the disputes individually then that would be done.
Theodore Boutrous, Uber lawyer expressed how pleased they were with the order given by the ninth circuit that reserved a class classification.
The decision currently has binding effect in nine states in the US, although other courts could cite the decision.
Similar Suits Against Uber
This isn’t the first time Uber will face a suit of this nature because, over the years, several drivers have instituted actions against the company claiming that they are employees and that made them entitled to overtime, minimum wage as well as other benefits that independent contractors do not enjoy.
The Chief Executive Officer of the company, Dara Khosrowshahi, is reportedly making plans to take the company public in 2019. As such, its ability to satisfactorily retain drivers is very vital to the company’s prospects of growth.
Since he became the CEO, he has been putting in efforts into improving the company’s image and has addressed federal civil and criminal probes into the company’s business practices. He has also contributed to eliminating the chauvinism reputation of the company.
A professor at University College of Law, Keith Cunningham-Parmeter earlier noted that there is a very significant difference between being an independent contractor and an employee. Cunningham-Parmeter stated that depending on your classification, it is either you get several rights or you get nothing at all.
That is because a lot of employment rights do not apply to independent contractors. Companies are not expected to provide independent contractors with health insurance neither are they expected to make scheduled breaks available to them.
Also, independent contractors handle the responsibility of personal payment of their taxes and they are not as of necessity entitled to getting any payment upon unemployment or any workers compensation whatsoever. The only case when that is possible is if they probably made such payments by themselves.