I was involved in the exact same type of class-action litigation as a contractor for UPS Supply Chain Solutions, who withheld payments from me in a very similar fashion that Uber drivers are accusing their company, only instead of tips, it was a fuel surcharge. Our case also began in Northern Californa, only to have competing attorneys recruit additional plaintiffs to sue in Florida, which led to the case becoming consolidated and transferred to South Florida District Court. The case I was involved with, Dunakin vs. UPS Supply Chain Solutions, ended up being dismissed with Judge Joan Leonard ruling that individual driver’s cases were too different to be considered part of the same class.
Hundreds, if not thousands of Uber drivers will soon be joining the three that filed a lawsuit in San Francisco Federal Court two years ago. U.S. District Judge Edward Chen ruled on Tuesday that the case’s fundamental question, should Uber drivers be considered employees or contractors, was basic enough to invite class-action litigation. The ruling comes after Judge Chen denied a motion to dismiss the case filed by Uber in March. Although the ruling could invite several thousands of California Uber drivers to join in the litigation, Judge Chen limited the class membership to those who began working for the company before May of 2014, with those joining later having to specifically opt out of Uber’s arbitration agreement in order to sue the company. The class also only involves workers who drive for UberX, in which drivers pay their own expenses, and the town-car service UberBlack. The lawsuit follows a California labor commissioner’s ruling in June that an Uber driver was an employee, a decision which Uber has appealed. Chen also denied class-entry for one of the three plaintiffs.
Gibson Dunn attorney Ted Boutrous, who is representing Uber, said the company will likely appeal and that Judge Chen’s decision is “based on several key legal errors.” Boutrous said, “The mountain of evidence we submitted to the court including the declarations of over 400 drivers from across California demonstrates that two plaintiffs do not and cannot represent the interests of the thousands of other drivers who value the complete flexibility and autonomy they enjoy as independent contractors. The attorney for the drivers Shannon Liss-Riordan said that she will try to expand the lawsuit to include Uber drivers throughout the U.S. The lawsuit itself is seeking the reclamation of tips that Uber drivers are claiming the company stole from them. While the class-action lawsuit is specific to the tips claim, a ruling that Uber drivers are employees could have a large-scale impact, including forcing Uber to pay for Social Security and Medicare taxes, as well as potentially health benefits as well. The case has brought national attention; with presidential front-runner Hillary Clinton saying that on-demand companies like Uber raise “hard questions” about the future of labor in the U.S.
I have avoided writing about the Uber case until now for a very specific reason…personal frustration. I was involved in the exact same type of class-action litigation as a contractor for UPS Supply Chain Solutions, who withheld payments from me in a very similar fashion that Uber drivers are accusing their company, only instead of tips, it was a fuel surcharge. Our case also began in Northern Californa, only to have competing attorneys recruit additional plaintiffs to sue in Florida, which led to the case becoming consolidated and transferred to South Florida District Court. The case I was involved with, Dunakin vs. UPS Supply Chain Solutions, ended up being dismissed with Judge Joan Leonard ruling that individual driver’s cases were too different to be considered part of the same class. Although individuals were still permitted to file claims separately, I was not able find an attorney in time to beat the statute of limitations on the case, which drug out for nearly the entire three year window for damages. From my vast experience in the field of logistics, I must say that UPS contractors were much more alike than Uber drivers, having to undergo specific TSA-related training along with other rigid compliance standards.
While I do not claim to be an attorney like Liss-Riordan, I do have direct experience in this kind of litigation from a very personal perspective. I would advise the plaintiff’s counsel to reconsider expanding the lawsuit nationwide. Beyond an appeal, which if conducted in the 9th Circuit will likely lead to an upheld ruling, look for Uber’s next move to be a change of venue filing. It could be a risky move for the well-financed company, potentially adding thousands of additional plaintiffs, but it could pay off in the multiple millions like it did for UPS. Judging by a decade’s worth of rulings, the Northern California District is known as a pro-labor court, one that Uber attorneys likely want no part in. Liss-Riordan would be wise to keep the case limited to California drivers, while Uber attorneys will likely weigh the cost-benefit analysis of a potential multidistrict litigation gamble.
Sources:
Christian Science Monitor – Dan Levine/Reuters
CNet – Dara Kerr
The Recorder – Marisa Kendall
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