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Ruling Gives Uber Leverage over Drivers

Wednesday, September, 21, 2016

Uber Technologies Inc.’s arbitration agreements were recently ruled to be valid according to an appeals court. The US Court of Appeals in San Francisco court determined Uber has the authority to enforce the agreements with drivers, which critics of arbitration clauses view as a massive blow to driver efforts to secure benefits and protections given to employees in California.

This decision is the first given by a federal appellate court concerning Uber’s ability to require driver taken disputes to arbitration. This enables the company to fight drivers one-on-one and avoids the risk of class action. It gives Uber the upper hand in a lawsuit covering nearly 400,000 current and former Uber drivers throughout California and Massachusetts who took legal action requesting they be treated as employees, as opposed to independent contractors.

Some speculate the decision could also give the company more leverage with drivers who sue to upend the gig-economy workforce in other states.

In addition to this, Uber also faces lawsuits over pricing and business practices, as well as efforts on the part of local regulators to force compliance with laws that apply to taxis.

An attorney for Uber stated in response to the recent ruling, ““Arbitration is a fair, speedy and less costly alternative to class-action litigation,” he said in an e-mail. “We’ve always believed our optional arbitration agreements should have applied in this case, and we’re pleased with the court’s decision today."

The appeals court did say drivers would be able to proceed in court with claims brought against Uber under California’s bounty hunger law, the Private Attorneys General Act, which enables employees to step into the shoes of the state’s labor commissioner and file enforcement actions.