A federal appeals court has overturned an order enforcing an Uber arbitration clause and dismissing a class action lawsuit claiming the company’s New Jersey drivers are misclassified as independent contractors.

The U.S. Court of Appeals for the Third Circuit ruled Wednesday that a U.S. District Court judge erroneously granted Uber’s motion to dismiss the case and compel arbitration. The appeals court said the judge below was wrong to conclude that Uber drivers were not entitled to an exemption to the Federal Arbitration Act for transportation workers engaged in foreign or interstate commerce.

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