Uber drivers in Massachusetts and California have filed a new round of class-action lawsuits against Uber Technologies Inc., based on a federal appeals court ruling Wednesday that may allow Uber drivers not to be bound by arbitration agreements and on new California legislation that creates a strict definition for classifying workers as employees.
The changes give Uber drivers more leverage to challenge their status as independent contractors.
In the appeals court case, a unanimous three-judge panel in a New Jersey case said that the Federal Arbitration Act — which exempts interstate railroad workers and seamen from arbitration agreements — may also apply to Uber drivers. That means Uber drivers who signed arbitration agreements that blocked them from joining lawsuits can now sue over minimum wages and overtime pay.
The California legislation, expected to be signed by the governor, stating that workers whose tasks are directed by the company and who perform jobs that are part of the company’s regular course of business are considered employees, not contractors.
Massachusetts has a similar law.
Uber said that the California law would not apply to it, as it has said about the Massachusetts law, because the company’s main business is technology, not driving passengers. The company did not respond to a request for comment about the lawsuits.
Earlier this year, Uber reached a $20 million settlement with drivers in Massachusetts and California who had opted out of Uber’s arbitration clause. The case originally involved as many as 385,000 drivers but was reduced to a class of about 13,600 after Uber’s arbitration agreements were ruled enforceable.
The drivers in the new cases, filed Wednesday in US District Court in San Francisco and Thursday in Boston, are represented by Shannon Liss-Riordan, the attorney who filed the previous Uber misclassification complaints.
Liss-Riordan has brought a number of misclassification cases against Lyft, Grubhub, DoorDash, and other so-called gig economy companies that have also been bogged down by arbitration agreements. But in suits involving Amazon Flex drivers in Massachusetts and in a national case filed in Seattle, the courts ruled that drivers weren’t bound by the arbitration agreement in their contract because, as in the Uber federal appeals court ruling, they fall under the transportation workers’ exemption to the Federal Arbitration Act.
Liss-Riordan is also seeking an injunction to order Uber to comply with state laws.
“I’ve got clients who are sleeping in their cars because they’re driving 70, 80 hours a week and they’re not making minimum wage,” said Liss-Riordan, who is challenging US Senator Ed Markey in next year’s Democratic primary.
“I care about working people being trampled on by large corporations who think they are above the law. Corporations in America today think that they can write all the rules and ignore the working people who make their business possible.”
John Capriole, a Haverhill resident who is lead plaintiff in the Massachusetts complaint, has to cover his own expenses and is not guaranteed minimum wage because he is not considered an Uber employee, according to the court filing. He has never been paid overtime when he worked more than 40 hours a week.
But Uber is clearly his employer, the complaint states, because it sets his rate of pay, controls the riders he transports, and can terminate him at any time. “Without drivers to provide rides for Uber’s customers, Uber would not exist,” the suit says.
The new California measure could be an “inflection point” in the growing controversy over the rights of gig-economy workers, said David Weil, dean of the Heller School for Social Policy and Management at Brandeis University and former head of the Wage and Hour Division at the US Department of Labor under President Obama. The federal appeals court’s arbitration ruling could also breathe new life into lawsuits against these companies, he said.
The growing number of online platforms in the business of delivering food and packages automatically assume their workers are independent contractors, Weil said, and this generally means lower wages and fewer job protections.
“We’re unwinding the retail sector with this model,” he said. “That, to me, is unfortunately doubling down on the erosion and doubling down on some of the factors that are leading to greater earnings inequality.”