Cases like Uber dispute involving arbitration clause in driver contract could go either way, lawyer says

By Brian Brueggemann | Apr 16, 2019


Uber scored a victory in a recent court dispute involving a driver under contract with the company.

A federal judge in the U.S. District Court for the Middle District of Florida ruled that a driver's complaint that Uber improperly deactivated him due to an allegation of sexual harassment must go through arbitration and that the arbitration provision in Uber’s agreement with its drivers was valid.

The driver, Phillip Gray, alleged Uber violated his constitutional rights because he was unable to respond to the harassment allegation before Uber terminated his account.

Court fights involving Uber's use of contractor-drivers and the arbitration clause in the driver agreement have produce mixed results. 

Andrew Froman, a Florida lawyer with expertise in defending companies that employ contract workers, says Uber is likely to face more challenges regarding the validity of its arbitration clause.

Froman, an attorney with the Fisher Phillips law firm, which specializes in workplace law, said the Gray case is a "limited" ruling that addresses a specific complaint made by the driver.

"All the court said was that Uber's arbitration agreement as to these kinds of claims is enforceable and is going to require the driver – if he wanted to pursue the claims – to pursue it through arbitration," Froman said.

Froman noted that decisions on Uber's arbitration clause have gone both ways in other cases, including:

– In 2016, a federal judge in San Francisco struck down Uber’s arbitration agreement as unenforceable;

– In 2018, the U.S. Court of Appeals for 9th Circuit in California reversed a lower court decision and said the arbitration agreement was valid; 

-- In 2018, the U.S. Supreme Court ruled mandatory arbitration agreements are generally enforceable; and

– In March 2018, the U.S. Court of Appeals for the 6th Circuit ruled, under Uber's arbitration agreement, any claims by drivers regarding wages and overtime must go through arbitration.

Froman said he expects more court fights involving contracted workers, in part because there's a lot at stake for both the companies and the workers. As the economy expands, there will be more questions of whether certain types of workers can even be classified as contractors.

"There's money at stake, especially unpaid overtime money, which is time-and-a-half, and there's a provision for liquidated damages, which doubles the amount that the individual might be owed," Froman said.

Froman said companies "really need to be careful about the language of your agreement."

Froman said it is hard to say whether companies or contracted workers are having more success in court cases involving independent contractors and arbitration agreements. He noted that some contractual computer programmers have won big cases involving overtime, while Uber has had a streak of success in cases involving contractual drivers.

"It's really hard to say that one side is winning more than the other," he said, noting that a big factor is whether the court is located in a conservative-leaning geographic area or one that leans politically to the left.

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