On Monday, the Ninth Circuit affirmed the Northern District of California’s decision allowing Uber Technologies Inc.’s motion to compel arbitration and denying the plaintiffs’ motion for a preliminary injunction. The plaintiffs are Massachusetts Uber drivers led by John Capriole who claimed they should not be classified as independent contractors.
When the plaintiffs signed up to work for Uber, they agreed to Uber’s 2015 Technology Services Agreement, “which advised Plaintiffs of a mandatory arbitration agreement, governed by the Federal Arbitration Act (FAA),” the filing said explaining the ruling.
Uber classifies all of its workers as independent contractors instead of employees, which means that each driver is “required to pay business expenses (such as the cost of maintaining their vehicles, gas, insurance, phone and data expenses, as well as other costs), they have no guaranteed minimum wage or overtime premiums, and they do not accrue paid sick leave,” the filing explained. In September 2019, the plaintiffs filed a putative class action lawsuit requesting a preliminary injunction to reclassify drivers as employees so they could receive benefits under Massachusetts state law.
Uber countered the lawsuit by pointing out the arbitration provision, and filing a motion to compel arbitration. The plaintiffs claimed that they are exempt from mandatory arbitration because they engage in foreign or interstate commerce, premised on the fact that they “sometimes cross state lines or pick up and drop off passengers at airports who are heading to (or returning from) interstate travel.”
The Court used Grice as a precedent, which determined that “rideshare drivers who pick up and drop off passengers at airports do not fall within this residual category” and thus concluded that Uber drivers are not exempt from mandatory arbitration because their work “‘predominantly entails intrastate trips,’ even though some Uber drivers undoubtedly cross state lines in the course of their work.”
The plaintiffs also argued that they are seeking “public injunctive relief,” but the Court concluded that “the public health implications of paid sick leave, which would not even begin to accrue for months, only ‘benefit the general public incidentally,’” and therefore did not require public relief.
The Ninth Circuit Court of Appeals affirmed the Northern District of California’s ruling to grant Uber’s motion to compel arbitration and deny the plaintiffs’ motion for a preliminary injunction. Both parties must bear the costs of appeal.
The plaintiffs are represented by Lichten & Liss-Riordan PC.
