Judge Hands Uber Another Setback in California Labor Lawsuit

San Francisco, CAUber has been handed another setback in the California labor law claims filed by the company’s drivers. In September, US District Court Judge Edward Chen granted class-action status to plaintiffs in the California labor lawsuit. Now, the judge has made another ruling that could add thousands of more plaintiffs to the suit: he ruled the company’s arbitration clause was not enforceable.

According to CNET (11/9/15), Judge Chen ruled that even if Uber’s drivers had agreed to the company’s arbitration clause, they would still be eligible to join the class-action lawsuit filed by drivers against the ride-sharing company. That means Uber could face up to 160,000 plaintiffs in the California lawsuit.

Plaintiffs filed the lawsuit in 2013, alleging they were misclassified as independent contractors, even though they were treated in many respects like employees. Because of the alleged misclassification, employees say they were forced to pay for expenses related to the operation of their vehicle, but were also denied tips. By classifying drivers as independent contractors, Uber also does not have to pay benefits including Social Security, sick days or overtime.

In his ruling, Judge Chen also granted plaintiffs the right to pursue claims related to vehicle and phone expenses.

Uber has said its drivers like the flexibility of being independent contractors because they set their own working hours and are able to provide services to other ride-sharing companies.

Arbitration clauses generally mean that claimants are not able to file a lawsuit to settle a dispute, rather they have to go through arbitration, which would prevent any sort of class action from being filed. Although Judge Chen ruled against arbitration, some drivers, including those who registered as an Uber driver under a company name, are still excluded from the lawsuit.

Shortly after Judge Chen issued his ruling, plaintiffs in the lawsuit pushed for an emergency injunction preventing Uber from contacting class members directly. Plaintiffs reportedly claimed Uber sent a new arbitration agreement that was confusing and could trick class members into thinking they are not eligible to be class members if they sign the new agreement.

Uber has reportedly said it will appeal Judge Chen’s ruling on arbitration, according to the Los Angeles Times (12/9/15). The case is expected to go to court in June 2016.

The lawsuit is Douglas O’Connor et al v. Uber Technologies Inc, case no. 3:13-03826, US District Court, Northern District of California.