UBER Scores Huge Win In California Misclassification Lawsuits

by G. Spencer Mynko, Esq.

ALL Trucking Companies Need To Follow Uber’s Lead On This Issue

FINALLY – GOOD NEWS FOR TRUCKING COMPANIES WHO UTILIZE INDEPENDENT CONTRACTOR TRUCK DRIVERS.The Ninth Circuit’s ruling that Uber drivers suing over alleged misclassification must fight it out in individual arbitration makes clear the power of class action waivers in arbitration agreements to shield employers from legal attack

A unanimous three-judge panel of the federal appeals court determined that Uber Technologies Inc.’s arbitration agreements with drivers were valid and enforceable based on the U.S. Supreme Court’s recent Epic Systems ruling (where in a 5-4 decision in May 2018, SCOTUS ruled that companies can compel workers to waive their right to class actions and instead pursue arbitration individually for various workplace disputes, without violating current labor laws), as well as an earlier Ninth Circuit ruling related to Uber’s arbitration agreements. The ruling deals huge blow to the hundreds of thousands of current and former Uber drivers who sought to band together to gain employee status, but will now have to pursue their claims against Uber in individual arbitration. The high court had ruled in May that employers can legally include class waiver provisions in employee arbitration agreements.

The ruling essentially gives trucking companies the right to use work contracts that don’t allow drivers to pursue class actions and force them into arbitration. The court firmly established that businesses aren’t violating the National Labor Relations Act if they force workers to forgo the ability to pursue class actions by including class waivers in arbitration agreements that workers must sign as a condition of employment. The Court held that mandatory arbitration agreements must be enforced under the Federal Arbitration Act according to their terms, even if those terms include individual arbitration. Uber scored the big break it needed to beat scores of class actions stemming from its business practice of considering drivers to be independent contractors rather than employees.

Therefore, Employee Handbooks and Independent Contractor agreements are perhaps among the most critical and important documents a company can have. These documents dictate the relationship between employer and employee, and principal and contractor. Requiring any dispute between the parties to go private arbitration where drivers will now be forced to settle their claims via arbitration one by one.

This case gives further ammunition to trucking companies who are seeking to defend the validity of class-action waivers and the validity of arbitration agreements. When trucking companies have more leverage, they can insist upon arbitration clauses as a condition of employment – and thereby prevent drivers from using the traditional justice system to correct systemic workplace misconduct. Any lawsuit, let alone a class action lawsuit, can place incredible burdens upon trucking companies, but a valid arbitration agreement that requires each individual to use the arbitration process often limits the extent of discovery and has no precedential value for future cases. To put it simply, if you are being sued for wage and hour violations or misclassification, you would much rather defend the matter in an arbitration proceeding, than in Superior Court. The ninth circuit ruling validates Uber’s arbitration provisions and all trucking and transportation companies should utilize a similar provision.

These arbitration agreements make it harder for drivers to assert their rights alleging that the trucking company misclassified them as independent contractors. Indeed, trucking companies will be able to fall back on their arbitration clauses to avoid litigation. The bottom line is, these agreements are still critically important to any company working with subcontractors and still can limit your exposure.

Arbitration agreements:

These documents are usually, but not always, incorporated into any major contract. However, not all arbitration clauses are created equal, and if they’re not enforceable, they’re worthless.

Quickly, here’s a few reasons arbitration can be so beneficial:

Privacy: Arbitration is a private, generally confidential forum to resolve disputes. The court system is public.

Speed. Arbitration can move along quickly.

Decisions are Non-Appealable: there is finality with the decision

Control. Parties can control which rules apply

No Document Dumps. Discovery can limited and manageable in arbitration

No Fishing Expeditions or Discovery Abuses. Endless, costly discovery disputes and abuses can be avoided in arbitration.

Certainty: How the dispute will be handled can be determined before the dispute exists.

Cost: Arbitration can be expensive, but can work to your advantage when dealing with an opponent who can’t afford the costs.

We have State of the Art Arbitration Agreements that will provide maximal protection to your company.

Transportation Attorneys has reviewed the Uber arbitration agreements that were upheld by the 9th circuit and we are ready to help your trucking implement Employee Handbooks and Independent Contractor agreements with similar arbitration provisions that will require your employees and subcontractors to arbitrate most any dipsute (An exception would a Work Comp claim which are not arbitrable).

I cannot stress enough how critically important it is for all trucking companies to implement these arbitration agreements with class actions waivers NOW! The courts have handed trucking companies a huge victory, and if you find yourself battling labor law, wage and hour, or misclassification lawsuits in Superior Court where a jury will decide your fate, you only have yourself to blame.