As many of you are aware, Uber Technologies, Inc. (“Uber”) is a technology company that serves as a conduit between riders looking for transportation and drivers seeking riders. Class action lawsuits against Uber have been filed all over the country alleging such claims as Uber misclassified its drivers as independent contractors as opposed to employees; failed to pay the drivers overtime compensation for hours worked over forty (40) hours in a week; and required the drivers to pay for business expenses that benefited Uber. These cases, unfortunately, have come across two difficult hurdles: binding arbitration and class action waiver provisions.
One such case was filed in New Jersey. Singh v. Uber Technologies, Inc., — F.Supp.3d —, 2017 WL 396545 (D.N.J. Jan. 30, 2017). In that case, plaintiff Jaswinder Singh filed a class action complaint against Uber alleging all of the above claims. Uber immediately moved to dismiss the complaint and compel arbitration by arguing that Mr. Singh was bound by an arbitration clause found in the “Raiser Software License and Online Services Agreement” (the “Agreement”). The Agreement is located electronically on the Uber App. In order to actively use the Uber App to begin accessing Uber services, a potential driver must confirm that he or she has reviewed and accepted the Agreement by clicking “YES, I AGREE” and then he or she is prompted to confirm that he or she has reviewed an accepted the Agreement for a second time. Id. at *1. Mr. Singh did just that.
The Agreement, in relevant part, contains the following arbitration provision:
IMPORTANT: This arbitration provision will require you to resolve any claim that you may have against the Company or Uber on an individual basis pursuant to the terms of the Agreement unless you choose to opt out of the arbitration provision. This provision will preclude you from bringing any class, collective, or representative action against the Company or Uber…
Except as it otherwise provides, this Arbitration Provision is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law or before a forum other than arbitration. This Arbitration Provision requires all such disputes to be resolved only by an arbitrator through final and binding arbitration on an individual basis only and not by way of court or jury trial, or by way of class, collective, or representative action.
Id. at *2.
Mr. Singh argued that the arbitration provision was unenforceable on multiple legal grounds. Id. at *3. The District Court disagreed with each of Mr. Singh’s arguments and dismissed the complaint and compelled arbitration of Mr. Singh’s claim on an individual basis. Id. at *4-12. The District Court found that the Agreement was valid, the parties agreed to arbitrate their claims and the arbitration provision was not unconscionable. Of significant interest, the District Court determined that the class action waiver provision did not violate the National Labor Relations Act (the “NLRA”)’s prohibition against restraining employees from engaging in “concerted activities” because the Agreement contained an “opt-out” mechanism which Mr. Singh did not avail himself of. Id. at *9-10.
What Does This Mean?
The take from this case is that New Jersey courts, unless reversed by the Third Circuit Court of Appeals, are going to enforce Uber’s arbitration and class action waiver provision if the driver fails or neglects to opt-out of the Agreement. This will certainly have a chilling effect on attorneys agreeing to bring these types of claims against Uber if they must be brought in arbitration on an individual basis.
Contact a New Jersey Employment Lawyer
Before entering into the Uber Agreement, you should meet with an experienced employment attorney to discuss what your rights are and how they may be affected by the choices you make. Contact the attorneys at The Sattiraju & Tharney, LLP in Princeton, New Jersey at (609) 722-7039 for a free consultation to discuss these types of issues. We fight for workers’ justice under a myriad of employee-rights statutes.
FAQs About Uber’s Class Action Lawsuit
What is the main hurdle drivers face when trying to sue Uber in a class action lawsuit?
The biggest obstacles are the binding arbitration and class action waiver provisions found in Uber’s driver agreement. These clauses force drivers to resolve any employment disputes—such as claims over being misclassified as independent contractors or missing out on overtime—through private arbitration on an individual basis, rather than joining together in a courtroom lawsuit.
How did Uber ensure that the driver in the Singh v. Uber Technologies case had actually agreed to arbitration?
Uber’s agreement is hosted electronically right inside the Uber app. To use the app and start picking up riders, a potential driver has to actively confirm they reviewed and accepted the terms by clicking “YES, I AGREE,” and then the app prompts them to confirm their acceptance a second time.
Why did the court decide that Uber’s class action waiver didn’t violate federal labor laws?
The court ruled the waiver was valid because the contract included an “opt-out” mechanism. Because the driver had the opportunity to opt out of the arbitration provision but chose not to do so, the court determined that the agreement wasn’t unfairly restrictive and that the driver was legally bound to arbitrate his claims individually.