Judge Edward Chen, Northern District of California (Hillary Jones-Mixon)
SAN FRANCISCO — The court has already shot down Uber once, but the rideshare company will try again Friday to convince a federal judge it shouldn’t have to tell new drivers about a pending class action before binding them to arbitration.
In a motion for reconsideration, Uber Technologies Inc. argues U.S. District Judge Edward Chen overstepped his authority in December when he ordered Uber to change the arbitration agreement it asks new drivers to sign. Chen can only dictate Uber’s communications with members of the potential class, not new drivers, Morgan, Lewis & Bockius partner Robert Hendricks argued on behalf of Uber.
“The court manifestly failed to consider the material fact … that since the filing of the complaint Uber has issued the challenged arbitration agreement only to prospective users of its software application service, who are by definition not members of the putative class,” Hendricks wrote.
Uber, a car service that links drivers and riders using a smartphone app, is under fire for claims it withheld tips customers believed drivers were receiving and failed to reimburse drivers for expenses.
The company inserted an arbitration clause into its driver agreement in July, before plaintiffs filed their case in San Francisco federal court, but after plaintiffs filed similar suits in Massachusetts and Illinois.
Chen ruled the agreement was “potentially misleading, coercive and threaten[ed] to interfere with class member rights.” He ordered Uber to stop issuing the agreement until the company amended it to give drivers notice of the pending lawsuit and reasonable means for opting out of arbitration.
Chen specified those requirements apply to past, current and new drivers.
On Friday, Hendricks’ team will try to save Uber’s arbitration agreement, insisting that sending it to new drivers does not affect the litigation because prospective drivers fall outside plaintiffs’ class definition of “drivers who have worked for Uber.” But plaintiffs lawyers argue that, while no class has yet been certified, their intended class encompasses all drivers who work for Uber at least through the date of class certification.
“Defendants’ argument in support of its request for reconsideration is based upon a flawed understanding of English grammar,” Boston-based Lichten & Liss-Riordan partner Shannon Liss-Riordan stated in her responding brief.
Liss-Riordan continued on to give defendants a grammar lesson, explaining the function of the present perfect tense to describe an action that began in the past but continues into the present.
San Francisco firm Duckworth Peters Lebowitz Oliver is also representing plaintiffs.
In January, Chen rejected Uber’s request to stay his order until after Friday’s hearing, and reiterated that Uber must stop sending out its original arbitration agreements.
Liss-Riordan and her team accuse Uber of violating Chen’s orders by continuing to send arbitration agreements to its drivers, a claim Uber denies.
Plaintiffs have submitted a declaration from Uber driver Guy Gottlieb, who says the company sent him an arbitration agreement Feb. 26, almost three months after Chen’s original order.
Uber contends the Feb. 26 arbitration agreement was a one-time mistake. Gottlieb was suspended from Uber, and when the company reactivated his account, it automatically sent him the same version of the licensing agreement he originally signed, according to the defendant’s reply brief. The agreement contained an arbitration clause because Gottlieb first signed it before Chen’s order.
Uber declined comment on the active litigation.
“I think it’s very unfortunate so many companies whose practices are being challenged are trying to use arbitration as a shield,” Liss-Riordan said. “I hope this court does not allow Uber to get away with that.”
Hendricks did not respond to an emailed interview request.
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