The United States Supreme Court has declined to hear a case from Uber drivers who sought to be exempted from a mandatory arbitration clause in their employment contracts. The lawsuit sought to obtain an exemption from the arbitration agreement under the Federal Arbitration Act (FAA). However, because the court refused to hear the appeal, the lower court’s ruling will stand, meaning the Uber drivers’ case will go to arbitration.
What is This Case About?
Uber Technologies, Inc. is one of the country’s largest “rideshare” companies, which makes much of its money from drivers who transport people that ask for a ride through the company’s proprietary app. However, the company allegedly does not treat its drivers well, leading to a number of lawsuits alleging discrimination, wage theft, and other offenses. Due to a clause in the contract between Uber and its drivers, many of these claims must be handled in private arbitration, rather than the court.
What Was the Legal Issue at Hand?
In order to escape the mandatory arbitration clauses in their contracts, Uber drivers sought to be exempted from private arbitration through an exception in the FAA. The FAA exempts “interstate transportation workers” as a class from being bound by mandatory arbitration agreements. The primary question is whether Uber drivers qualified for that exemption.
What Was the Court’s Decision?
The Third Circuit Court of Appeals ruled that Uber drivers do not qualify as “interstate transportation workers” for the purposes of the FAA. Despite the fact that Uber is a company that operates across the country and even internationally, drivers who principally operate within a single state (which includes most drivers for the company) are deemed separate contractors to whom the classification does not apply. And because the Supreme Court refused to take up the case on appeal, this ruling stands, with Uber drivers now being forced into arbitration.
Why Does This Matter?
This is a major issue because millions of people work on a contract basis for app-based rideshare companies like Uber and Lyft. With mandatory arbitration agreements, these companies can protect themselves from litigation by forcing them into private arbitration, where they can be forced into legally binding judgments outside of the court system. As a result, they may have a much harder time getting the justice they deserve for the harm they have suffered.
Steven Mitchell Sack, the Employee’s Lawyer, is a New York employment lawyer with more than 44 years’ experience handling the many aspects of employment law. His new book, “Fired!: Protect Your Rights & FIGHT BACK If You’re Terminated, Laid Off, Downsized, Restructured, Forced to Resign or Quit,” is available in hardback, and contains valuable advice on dealing with employment and labor law issues. To purchase the book, feel free to contact Steven Sack at 917-371-8000 or visit the website at legalstratpub.com. To inquire about a legal matter, please feel free to contact attorney Steven Sack at 917-371-8000 or stevensackatty@hotmail.com.
