September 28, 2018
Citing the recent U.S. Supreme Court Epic decision, the Ninth Circuit dismantled a class-action lawsuit that sought to reclassify independent contractors as employees after finding the company's arbitration agreements were valid and enforceable, a ruling that may ultimately force the company to litigate tens of thousands of arbitration claims.
The case involving 240,000 current and former Uber drivers who are challenging their worker classification will now have to proceed individually through arbitration.
Expect the plaintiffs’ bar to fight back by filing myriad solo arbitration claims against Uber and other companies, a strategy intended to force employers into settlement negotiations for the entire group of arbitration claims.
“Thousands of drivers have already signed up for individual arbitration," said Shannon Liss-Riordan, the attorney representing the Uber drivers. "If Uber wants to resolve these disputes one-by-one, we are ready to do that—one-by-one.”
Takeaway: While the decision will help employers who may face a limited number of legal challenges regarding worker misclassification, companies with very large class action cases may want to weigh the costs of proceeding with those cases or litigating individual claims through arbitration.