Arbitration clause bars drivers from claiming class action status, court rules.
A federal appeals court handed Uber a significant win Tuesday in its battle to avoid having its drivers declared to be legal employees. Uber has asked the courts to throw out the lawsuit, because Uber's driver agreement requires this kind of dispute to be handled in private arbitration instead—an endorsement that the 9th Circuit Appeals Court has now accepted.
Uber says that its drivers are legally independent contractors, not employees. That's significant because federal law strictly regulates the relationship between employers and employees. Employees are guaranteed to earn federal minimum wage and are entitled to overtime pay if they work more than 40 hours per week. Uber employees, in contrast, are paid by the ride and might earn much less than minimum wage if they drive at a slow time of day.Previously on arbitration as a corporate tactic:
California law also gives employees the right to be reimbursed for expenses they incur on the job, which would be significant for Uber drivers who otherwise are responsible for gas, maintenance, insurance, and other expenses of operating an Uber vehicle.
Hence, the question of whether Uber drivers are employees or independent contractors is a big and important one. It's also a question that isn't addressed at all in Tuesday's ruling, as the courts never get to the substance of the plaintiffs' arguments about employment law. Instead, a three-judge panel of the 9th Circuit court ruled that the drivers signed away their rights to sue in court when they signed up to be Uber drivers. Uber's agreement with drivers requires that this kind of dispute be handled by private arbitration rather than by a lawsuit in the public courts. The court cited a Supreme Court ruling handed down in May that held that federal labor law did not preempt arbitration agreements....MORE
Arbitration: Outsourcing Justice
The Pernicious Spread Of Arbitration Stacked Against The Individual (and the class)
As Three More New Economy Companies Are Sued For Employee Misclassification, Uber Thinks It Has the Golden Ticket
With our outro:
...Uber has taken a cue from the securities industry (Shearson v. McMahon, 1987)
