Uber Asks Court to Reconsider Order to Stop Issuing Arb Clause to Drivers

RSS Feed

Uber Technologies Inc. (“Uber”), the popular rideshare company, is currently the subject of a putative class action brought by former drivers who allege that Uber did not pay the full amount of tips that customers believed drivers were receiving and failed to reimburse drivers for business expenses, among other claims. O’Connor v. Uber Technologies, Inc., No. 13-03826-EMC (N.D. Cal.).

In July 2013, Uber had inserted an arbitration clause, along with onerous opt-out requirements, into its new driver agreement, before the O’Connor plaintiffs filed their case. However, similar class actions had been filed in Massachusetts and Illinois. Lavitman et al. v. Uber Technologies, Inc., et al., Mass. Super. Ct. (Suffolk), C.A. No. 12-4490; Ehret v. Uber Technologies, Inc., C.A. No. 12CH36714 (Circuit Court of Cook County, IL). Plaintiffs in O’Connor filed an emergency motion to strike the arbitration provisions, and the court granted it in part on December 6, 2013. See Order Granting in Part Plaintiffs’ “Renewed Emergency Motion for Protective Order to Strike Arbitration Clauses,” O’Connor v. Uber Technologies, Inc., No. 13-03826-EMC (N.D. Cal. 2013) (available here). While declining to rule on the alleged unconscionability of the arbitration provision, the court found the new clause to be “potentially misleading, coercive, and threatens to interfere with the rights of class members” and ordered Uber to stop issuing the arbitration agreement until the company revised it to give past, current, and new drivers notice of the pending class action and a reasonable means to opt out of arbitration. Id. at 11-12.

In its motion for reconsideration, Uber argued that the court exceeded the scope of its authority under Rule 23 last December. Defendant asserted that the court failed to consider a material fact, “that since the filing of the [c]omplaint[,] 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.” See Defendant’s Motion for Reconsideration, at 3 (available here). Uber contends that the issuance of the agreement to new drivers does not affect the current litigation because future drivers fall outside of the class definition: “drivers who have worked for Uber.” Id. at 6 (citing Plaintiffs’ Complaint). Plaintiffs vigorously disagreed and replied that, while no class has been certified yet, the putative class encompasses all drivers who have driven for Uber, under the conditions described in the complaint through the date of judgment or at least through the date of class certification. See Plaintiffs’ Opposition to Defendant’s Motion for Reconsideration, at 4 (available here). Plaintiffs maintained that defendants’ argument “is based upon a flawed understanding of English grammar,” explaining that the function of the present perfect tense “have” is to describe an action that began in the past but continues into the present. Id. Uber was also accused of violating the court’s orders by continuing to send the new arbitration agreement to its existing drivers.

The motion for reconsideration was heard on April 18, 2014. No opinion has yet been issued.