Uber and other ride-sharing companies have been in the news lately as they begin to challenge their classification as independent contractors. Unlike employees, independent contractors are ineligible for minimum wage, overtime, worker’s compensation insurance, and cannot unionize.
Beginning in June 2014, Uber drivers signed an agreement waiving their rights to participate in a class action, yet drivers recently filed a class action lawsuit in California claiming they should be classified as employees and thus permitted to unionize. The judge decided that those who signed Uber’s arbitration agreement could not participate in the suit, leaving only 15,000 of the estimated 160,000 California drivers eligible to join the suit.
As most crafty plaintiff employment attorneys are doing now, the attorney representing the Uber drivers filed charges with the National Labor Relations Board alleging that the arbitration agreement violates the National Labor Relations Act. Since 2012, the Board has consistently ruled that arbitration agreements requiring workers to waive their right to participate in class actions are illegal and unenforceable. However, federal courts that have ruled on the issue have disagreed with the Board and have permitted these agreements. The Ninth Circuit Court of Appeals, which covers California, has not made a ruling—yet.
The Uber drivers, and the Teamsters who have been trying to organize them, hope that the Board will find the arbitration agreement unlawful and that the judge will allow the excluded drivers back into the class. We will be watching this case closely to see if the Board continues to find these arbitration agreements unlawful.