Federal judge grants class-action status to California Uber drivers

Drivers for the popular ride-sharing company will now be able to proceed as a group, rather than individuals, in a worker misclassification lawsuit that could have implications in the freight transportation industry as well.    A federal court judge has granted class-action to drivers for the popular ride-sharing company Uber Technologies Inc. in California, meaning the group will be able to proceed with its lawsuit together, rather than as individual plaintiffs.
   As many as 160,000 California Uber drivers could now potentially join the case as part of the group, which is seeking wage and tip reimbursement from the company.
   The case is the latest in a long list of worker misclassification lawsuits regarding drivers who had been previously considered independent contractors. The battle between operators and drivers has been playing itself out in courts all over the country and, at least for the moment, it appears the drivers are winning.
   Workers, along with regulators and advocate groups argue employers – Uber, taxi companies, drayage providers, trucking carriers – should pay wages and benefits required for full-time employees as opposed to the current practice treating drivers as independent contractors. The independent contractor classification is prevalent among port trucking companies, as well as long-haul and intermodal carriers despite drivers often working exclusively for one company that controls all aspects of drivers’ jobs.
   Not considering drivers employees allows companies to skirt regulations regarding minimum wage and overtime pay, unemployment insurance, workers compensation, and federal payroll taxes for Social Security and Medicare. It also shifts the responsibility for many operating expenses like vehicle maintenance and repair from the company to the employee, further reducing costs.
   Over the past five years or so, the U.S. Department of Labor and the state of California, among a few others, have considerably stepped-up enforcement efforts with regard to driver misclassification practices.
   The California Labor Commission in June ruled in favor of Uber driver Barbara Ann Berwick, granting her the right to be classified as an employee. The California agency ordered Uber to reimburse Berwick more than $4,000 in expenses because it said Uber more often than not acted like an employer.
   In July, the Labor Department released a standard assessment for employers to determine whether a worker should be considered an independent contractor or an employee. The crux of the test is how much control the company exerts over the worker’s daily activities and tasks.
   Federal courts in August ruled against two California companies, San Leandro-based National Consolidated Couriers Inc. and Stanford Yellow Taxi Cab of Mountain View, for deliberately misclassifying workers as independent contractors.
   Judge Edward M. Chen’s ruling did not address the merits of the drivers’ case against Uber, but because it established a precedent for future class-action distinctions, it could still have implications in the freight transportation industry as well.
   The domestic parcel arm of FedEx Corporation reached a tentative $228 million settlement agreement with plaintiffs in a lawsuit over drivers in California being paid as independent contractors in June. Just a few weeks later, the 7th U.S. Circuit Court of Appeals upheld a 2014 Kansas Supreme Court ruling that said the express carrier violated the Kansas Wage Payment Act by classifying over 500 FedEx Ground drivers in Kansas as independent contractors and not employees.
   Chen said in his ruling the “Plaintiffs have met their burden to show that a class can be certified on both the threshold employment classification question and their claim for converted tips under Labor Code section 351.
   “All UberBlack, UberX, and UberSUV drivers who have driven for Uber in the state of California at any time since August 16, 2009, and who (1) signed up to drive directly with Uber or an Uber subsidiary under their individual name, and (2) are/were paid by Uber or an Uber subsidiary directly and in their individual name, and (3) did not electronically accept any contract with Uber or one of Uber’s subsidiaries which contain the notice and opt-out provisions previously ordered by this Court (including those contracts listed in the Appendix to this Order), unless the driver timely opted-out of that contract’s arbitration agreement,” said Chen.
   “In sum, this decision is a major victory for Uber drivers,” said Shannon Liss-Riordan, the attorney representing the drivers in the case. “It will allow thousands of Uber drivers to participate in this case to challenge their misclassification as independent contractors, as well as to attempt to recover the tips that Uber advertised to customers are included in the fare, but are not in fact distributed to the drivers.”