Court Partially Grants Certification in Uber Misclassification Suit

On Tuesday, Judge Edward M. Chen of the Northern District of California issued an order partially granting and partially denying the plaintiffs’ motion for class certification in a driver misclassification suit against Uber.

According to the order, the plaintiffs are current or former Uber drivers alleging that “they and the putative class of approximately 4,828 other Uber drivers are Uber’s employees and therefore eligible for various protections under the California Labor Code.” The consolidated amended complaint alleged that Uber failed to provide paid sick leave, which is required by California Labor Code § 246, among other violations. This lawsuit is one of many driver misclassification lawsuits that Uber has faced, including a suit filed by California for violating various labor laws.

In its order, the court applied Rule 23(a) criteria of numerosity, commonality, typicality, and adequacy, to the plaintiffs’ claims that they are/were Uber employees rather than independent contractors and for their five legal claims: “failure to (1) reimburse business expenses, (2) pay minimum wage, (3) pay overtime, (4) provide properly itemized pay statements, and (5) provide paid sick leave.” The court also looked to whether the plaintiffs met their burden under Rule 23(b)(3), requiring them to “establish that the employment misclassification, and all of their substantive claims, can be resolved with reference to predominantly common proof (predominance) and that prosecuting their claims in a class action is superior to other available methods (superiority).”

Considering Rule 23(a) requirements, the court found that the plaintiffs “seek to certify a class of drivers who have driven for Uber in the state of California since February 28, 2019 (to August 31, 2020 and who opted out of Uber’s arbitration agreement.” The court found this to be ascertainable from Uber’s business records, adding that there have been 4,828 identified putative class members thus far. As a result, the numerosity requirement was satisfied.

The court added that in this instant action, “whether Uber misclassified its drivers as independent contractors is a common question that satisfies the commonality requirement” and the ABC test established in Dynamex and codified in Assembly Bill 5 (AB-5) to determine if a worker is an independent contractor or an employee is applicable in this case because “Uber is a ‘hiring entity.’” Thus, the commonality requirement was also satisfied.

In a previous suit, the court noted that it rejected Uber’s argument that the plaintiffs would be unable to represent the putative class because some drivers may not want reclassification, as such, the court stated that it also rejects this argument in the instant action and added that putative class members can opt out of the putative class. The court also disagreed with Uber’s claim that the amount of time a driver used the app was important to determine typicality; instead, the court found this claim irrelevant.

However, the court found that “the fact that some Uber drivers use competing applications and work for third-party transportation companies defeats predominance under prong C of the ABC Test to the extent plaintiffs seek to certify the entire class with respect thereto. But that does not necessarily preclude certification of a class under prongs A and B of the ABC test.” Nevertheless, the court stated that the plaintiffs’ claims are typical and adequate. As a result, the plaintiffs satisfied Rule 23(a) criteria.

The court also noted to Proposition 22, a ballot measure that passed in the November 2020 election, ensuring that gig economy giants like Uber would be exempt from AB-5 and not have to reclassify drivers as independent contractors. However, companies must provide drivers with specific wage and hour protections under the proposition. The court declared that Proposition 22 “does not apply retroactively,” therefore, “at most it forecloses damages in this case for conduct that occurred after December 16, 2020. That is to say, Prop 22 limits the class period.” As a result, the class period will end on December 16, 2020 and the suit will apply the ABC test during the Class Period because Prop 22 was “not yet the law of the land.”

In sum, the court grants in part the plaintiffs’ Rule 23(b)(3) motion for certification for California Uber drivers between Feb. 28, 2019 and Dec. 16, 2020, and who opted out of Uber’s arbitration agreement. The “trier of fact” will determine if the class satisfies prongs A and B, and if not if the class’s expense reimbursement and itemized wage statement claims. The court denies the plaintiffs’ Rule 23(b)(3) motion as it relates to prong C of the ABC test as well as the plaintiffs’ minimum wage, overtime, and paid sick leave claims.

The plaintiffs are represented by Lichten & Liss-Riordan, P.C. and Uber is represented by Gibson, Dunn & Crutcher LLP.