Uber Lawsuit-Follow Up
A recent lawsuit filed in United States District Court against ride sharing company Uber has been granted class action status. Allowing the case to proceed as a class action could have a number of consequences for both the members of the class action as well as Uber itself.
Class Action Certification
When the case was initially filed in District Court in San Francisco, the original three plaintiffs were looking to certify up to 16,000 Uber drivers for the class action. However, the total number of drivers that will be allowed to participate in the class action is approximately 4,000. The discrepancy in the number of drivers arises from an arbitration clause that Uber put in place in 2014. The arbitration clause prevents drivers from suing the company in a class action; rather, drivers who are bound under the arbitration clause requires all legal disputes between Uber and drivers to be resolved by arbitration.
What this means is that any drivers who are under the arbitration clause are ineligible to be part of the class for the lawsuit. In addition, one of the original plaintiffs listed in the complaint was disqualified from participating in the class action.
How This Affects Uber
Uber stated that they plan to appeal the class certification ruling. If they are unsuccessful in their appeal, however, the company could face a number of issues. First, Uber could potentially lose a large amount of money if they lose the class action lawsuit. By classifying the drivers as independent contractors, Uber is able to keep costs lower. However, if the drivers are classified as employees, Uber would be required to classify the drivers and employees and offer them benefits such as health insurance and any other employment-related benefits.
In addition, losing a class action lawsuit may result in the company being responsible for any back pay, sick time and any gratuities that the drivers may be owed.
How This Could Affect Other Companies
The outcome of the Uber lawsuit could affect other business organizations and how they do business. As stated above, this case could determine how companies designate workers and who qualifies as an employee. At the same time, people who are considered employees may be eligible for benefits that they would not have received otherwise, such as sick time.
Conclusion
Whenever a company is unsure if a worker qualifies as a potential employee, it is always a good idea to consult with a business attorney. A lawyer can explain if someone qualifies as a company worker and what any issues are. In addition, an attorney can explain what may arise if someone is classified as an employee compared to an independent contractor and what benefits the individual may be eligible for.