On September 1, 2015, Judge Edward M. Chen certified a class of Uber drivers in O'Connor v. Uber Technologies, Inc., No. C-13-3826 (N.D. Cal., filed Aug. 16, 2013). Plaintiffs, purporting to represent a class of approximately 160,000 Uber drivers, allege that Uber misclassified drivers as independent contractors instead of employees. In addition, they claim that Uber failed to reimburse drivers for expenses incurred in the performance of their duties and failed to pass on the entire amount of any tip or gratuity. The court ruled that a class could be certified for the employment classification and tip claims, but denied certification as to the reimbursement claim. In doing so, the court cited the "threshold and determinative nature of the employment classification question," noting that many courts had found that commonality is met when plaintiffs allege they were misclassified as independent contractors.
Excluded from the class are drivers who are bound by an arbitration agreement and drivers who work for Uber through another transportation company.
The case has significant implications for businesses that classify workers as independent contractors, particularly in today's sharing economy where such business models are increasingly common. This Uber decision is a warning to such businesses that they should proceed carefully and consider the merits of incorporating an arbitration clause and class action waiver into their agreements.