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Updated: O'Connor v. Uber (Ninth Circuit Court of Appeals)


Late last month, a three judge panel from the Ninth Circuit Court of Appeals issued a 3 - 0 decision that reversed a class action certification in one of the most closely watched gig economy independent contractor v. employee cases currently pending.  That case, O'Connor v. Uber, revolved around an argument by Uber drivers that the company improperly categorized them as independent contractors rather than employees.  Class certification had been granted back in 2015 and a settlement was almost reached (but ultimately rejected by the judge overseeing the case).  However, the class certification was reversed late last month on the grounds that Uber's arbitration clause prohibited class actions (and therefore mandated individual arbitrations rather than litigation in the court system).

This ruling not only overturned the class certification that involved thousands of California Uber drivers but also reversed a lower court's denial of Uber's motion to compel arbitration in three lawsuits.

It is notable that Uber's likelihood of compelling arbitration appeared to have taken a favorable turn after the United State's Supreme Court's ruling earlier this year in Epic Systems Corp. v. Lewis, in which the Supreme Court issued a 5 - 4 ruling and held that companies can compel employees to waive their right to class actions and instead pursue arbitration for workplace disputes.

After the 3 - 0 decision from the Ninth Circuit, an attorney said that while the decision was expected, a request may be made for an eleven judge appeals court panel to revisit the matter.  In the interim, the thousands of drivers who had their class certification reversed are apparently pursuing individual arbitrations against Uber.

There are a few takeaways here that I want readers to note.  First, while this decision is monumental in the ongoing gig economy independent contractor v. employee fight, this ruling applies only to the states in the Ninth Circuit.  While the decision could be cited elsewhere, Uber drivers in Minnesota, Florida, West Virginia, Vermont, etc. could still choose to continue with a class certification, if they wanted, without this case being binding precedent.  However, Uber drivers in the Ninth Circuit appear to have lost their option to pursue a class action against the company in regard to their worplace disputes (and instead will be required to pursue those claims only through binding arbitration).  As well, the 3 - 0 decision did not definitively stipulate that Uber drivers are independent contractors rather than employees.  This ruling only related to the reversal of the class certification.  With that being said, I would expect employers in the gig economy to point to this decision as further evidence that courts are likely to find the arbitration provisions mandatory and consequently that Uber drivers are correctly identified as independent contractors rather than employees.  Whether this attempted parallel will be successful is debatable.

For the time being, this is a major turning point in the ongoing gig economy independent contractor v. employee fight.



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