On November 17, 2015, the Court of Appeal for the Ninth Circuit denied Uber’s petition for permission to appeal Judge Edward Chen’s September 1, 2015 order granting class certification in O’Conner v. Uber Technologies, Inc. Judge Chen certified a class consisting of all California drivers who have signed up with Uber since 2009 but who had not agreed to Uber’s most recent terms of service and had not chosen to opt out of arbitration. The case has important implications not only for Uber but for the sharing economy as a whole, because the validity of plaintiffs’ claims hinge upon the notion that Uber drivers are employees rather than independent contractors. Such a finding could severely handicap a wide range of “gig” economy companies which, along with their users, rely on the flexibility and scalability that independent contractor relationships allow. The single page opinion issued by the Court of Appeal did not explain the court’s reasoning, simply citing to Chamberlan v. Ford Motor, which held that class-certification orders should be reviewed only when they sound a “death knell” for the losing party, raise an unsettled issue of law or are “manifestly erroneous.” The court of appeal obviously disagreed with Uber’s lawyers (and this blog), which have argued that the matter raises important issues of first impression and should have been accepted for review. As a result, plaintiffs will be allowed to proceed as a class on their claims that Uber wrongfully withheld tips from drivers, as well as the threshold issue of whether Uber drivers are employees or independent contractors.
The court of appeal decision can be found here.