The 9th U.S. Circuit Court of Appeals ruled Wednesday that Uber drivers who signed arbitration agreements with the ride-sharing company must use the arbitration process and not the courts to settle their grievances. Essentially, this means that only about 8,000 of some 240,000 drivers involved in the California-Massachusetts class action can proceed with the lawsuit. The others all signed arbitration agreements.
In making its ruling, the appellate court said U.S. District Judge Edward Chen lacked the authority to throw out the arbitration agreements as “unenforceable and unconscionable” in an earlier court case.
As a result of Chen’s earlier ruling, Uber subsequently reached a $100-million settlement with the drivers, a settlement that Uber might now void (Chen had already ruled it insufficient upon review).
The ruling also casts a pall over lawsuits by drivers in other jurisdictions.
Going to arbitration means the drivers must individually meet with an arbitrator, whose subsequent ruling is binding. Arbitration is generally viewed as employer-friendly.
An attorney for Uber called arbitration “fair and speedy” and less costly than courtroom litigation.
The drivers’ attorney, Shannon Liss-Riordan, responded: “The battle is far from over.”