Are drivers contractors or employees? An employment lawsuit in California is moving forward as a class action.
An employment lawsuit against Uber can now proceed as a class action after a judge certified a class of 160,000 Uber drivers in California.
Four drivers brought suit against Uber in 2013 alleging worker misclassification—according to them, they are employees of Uber, even if the company treats them as though they are independent contractors. Certification today allows the lawsuit to move forward on the behalf of 160,000 drivers, rather than just the four named plaintiffs, thus amplifying the potential payout by orders of magnitude.
The certification order, handed down by Judge Edward Chen, was granted in part and denied part, meaning that not all of the legal claims currently included in the complaint will be allowed into the class action.
The question of whether drivers are employees or contractors is a central one, but the lawsuit raises several issues. For example, the plaintiffs claim that by taking a percentage of the built-in gratuity, Uber is illegally taking drivers' tips. They also claim that Uber is legally obligated to reimburse drivers' expenses (for example, gasoline, wear-and-tear on cars, and bottles of water for passengers). While the drivers were granted certification on the the issue of misclassification and the issue of tip-splitting, they were not certified for expense reimbursement.
Certification is also limited to drivers who accepted certain contracts. A major issue in the earlier stages of this litigation was whether arbitration clauses (through which you sign away your ability to sue) in the Uber driver contract were valid, leading to multiple changes in the contract while the case was ongoing. The most recent arbitration clauses might be enforceable, although the judge has ruled that previous versions were not.
Uber fought hard against certification, and one of its strategies was to produce 400 personal declarations from drivers saying they wanted to be classified as independent contractors. Judge Chen was critical of the stunt during the hearing in August, saying, "Four hundred sounds impressive, but when you compare that with 160,000 class members, that's 0.25 percent. Not even 1 percent." The same skepticism reappeared in his opinion.
"[W]hile Uber claims that "countless drivers" hail the firm as a "liberator" from traditional employment, Uber has only submitted evidence of the beliefs of a small fraction of its California drivers: 400 out of 160,000 (i.e., 0.25%). . . . There is simply no basis in the record supporting Uber's claim that some innumerable legion of drivers prefer to remain independent contractors rather than become employees."
Uber hinted during the August hearing that it would appeal a decision for certification. Even if it doesn't, this lawsuit has a long way to go.