DENVER BUSINESS JOURNAL - In recent months, Uber has faced legal challenges to its labor practices that, in worst-case scenarios for the company, could upend its business model, which relies on classifying drivers as independent contractors.
Those class-action challenges may have just been undercut by an appeals court ruling stating that all but a relative handful of Uber drivers are bound to submit to arbitration for most disputes and so must proceed individually, not as part of a class action.
The Ninth Circuit Court of Appeals in San Francisco reversed a lower court’s decision that Uber’s arbitration clause was unenforceable in Mohamed v. Uber Technologies, a case concerning Uber’s background checks of drivers, according to a New York Times report. While the ruling applies only to that one case at the moment, the Times said it likely establishes a precedent for Uber to argue that other, bigger, class-action lawsuits ought not proceed on the same grounds.
Among such other cases is one headed by lawyer Shannon Liss-Riordan over whether drivers in Massachusetts and California should be classified as employees rather than contractors. The Times said about 400,000 drivers were part of that case. In contrast, USA Today noted that only about 2,000 Uber drivers in California are believed to have not agreed to arbitration in the event of disputes.