A Federal appeals court has ruled that a group of Uber drivers suing the company for misclassifying them as independent contractors instead of as employees must pursue their claims in arbitration. In this case, Capriole v. Uber Technologies, Inc., the drivers claim that under Massachusetts law, Uber should have classified them as employees. Because the company classified them as independent contractors, they took on unnecessary business expenses, paid too much in taxes, were denied minimum wage for their hours worked, and deprived of overtime pay, among other things.
The drivers had filed their claims in Court, and Uber moved to have the court case dismissed and ordered to arbitration. The lower Court sided with Uber, and the drivers appealed.
The drivers had argued that, even though they agreed to submit any claims to private arbitration instead of court, they fell under an exemption to mandatory arbitration that applies to a “class of workers engaged in foreign or interstate commerce.” The Court disagreed, finding that Uber drivers were not engaged in interstate commerce, but rather provided services within each of their home states.
In addition, the drivers had asked that the Court enter a preliminary order compelling Uber to classify drivers as employees. The Court denied this request and held that the arbitrator could rule on the drivers’ claims and issue whatever relief they deemed appropriate.
The legal landscape surrounding the ‘gig economy’ is still in flux. We will continue to monitor developments and provide our clients with comprehensive, up-to-date advice. If you are in need of advice about this or any other employment issue, please contact us.