Uber offices in California. Credit: Jason Doiy/ The Recorder

Uber Technologies Inc. told a federal appeals court that the recent U.S. Supreme Court ruling that upheld class action bans in employment contracts should defeat claims from the ride-hailing company's drivers that their arbitration agreements are unlawful.

In a consolidated case before the U.S. Court of Appeals for the Ninth Circuit, Uber drivers, who won certification as a class, contend the company has misclassified them as independent contractors and not employees. A federal trial judge concluded Uber's arbitration agreements “are not enforceable as a matter of public policy.”

Uber's lawyers at Gibson, Dunn & Crutcher argue the Supreme Court's decision last month in Epic Systems v. Lewis, which said companies can force workers to arbitrate labor claims, “defeats class certification and requires reversal of the district court's order certifying a class of hundreds of thousands of individuals.”

Theodore Boutrous

“Epic Systems ends any possible argument that the arbitration agreements should not be enforced,” Gibson Dunn's Theodore Boutrous told the Ninth Circuit, responding to the court's call for the views on how the recent Supreme Court decision affects the litigation.

Boutrous, an appellate partner in the firm's Los Angeles office, said most class members had signed arbitration agreements, and they should be forced to honor these contracts and submit their disputes to individual arbitration.

Uber recently announced it would end forced arbitration for sexual misconduct claims by employees, riders and drivers. The announcement, responding to outside pressure, did not open a door to eliminating all class action waivers. Other companies have also moved to restrict or eliminate arbitration for sexual harassment claims.

Lawyers for the plaintiffs suing Uber include Shannon Liss-Riordan, the Boston-based attorney from Lichten & Liss-Riordan who has long fought gig-economy companies over labor and employment practices.

In a filing Monday in the Ninth Circuit, Liss-Riordan agreed that the one part of the case—whether Uber's arbitration agreements are enforceable under the National Labor Relations Act—”has been decided against the plaintiffs” by the Supreme Court's ruling in Epic Systems.

Still, Liss-Riordan argued that the appeals panel should send the consolidated cases back to the trial court “for further consideration in light of a number of significant new cases that the district court has not yet addressed.” Liss-Riordan said those new cases have “changed the legal landscape” since 2015.

Liss-Riordan put a spotlight on the California Supreme Court's decision last month that is expected to make it harder for on-demand companies, such as Uber and Lyft, to label their workers as contractors and not employees. Business advocates are urging the state court to limit the reach of the ruling to only future matters.

More than half of private-sector employers have mandatory arbitration procedures, and 30 percent of these include class action waivers, the Economic Policy Institute reported in a recent study.

Hundreds of cases in federal appeals courts and at the National Labor Relations Board were on hold pending the outcome of the Supreme Court's Epic Systems decision. The lawsuits were trained on financial institutions, health care and tech giants and household-name retailers, among other defendants. Companies including AT&T Mobility, Bloomingdale's Inc., Neiman Marcus and CVS Pharmacy have cases on hold. In many instances, the NLRB is asking federal appeals court to return the cases to the board for further evaluation in response to the Supreme Court's ruling.

 

 

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