Uber Technologies Inc. is asking a California judge to confirm what it says is the first ruling by an arbitrator denying a driver’s bid to be treated as an employee.
The company is seeking a court stamp of approval on the decision rejecting the claim that the driver qualified as an employee rather than an independent contractor under California law. It could be the first of many such rulings after a federal appeals court’s decision last year that most Uber drivers can be forced by the company to resolve disputes through binding arbitration.
The arbitration win comes amid Uber’s multi-front legal war in California and other states to defend its contractor-based business model and avoid at least some of the restrictions that apply to competitors.
Uber isn’t required to seek confirmation of an arbitration award by a state judge, especially if there isn’t a financial component, said Candace Bertoldi, a labor and employment lawyer with Seyfarth Shaw LLP in Los Angeles. The ride-hailing company may have chosen to do so as a strategic move to influence other cases and deter future litigation, said Bertoldi, who isn’t involved in the case.
“It’s an important step that Uber is taking this public,” she said.
Although arbitration awards aren’t binding legal precedents, the great care taken to examine all the facts and analyze them appropriately under the law means others will take notice of the 48-page award by the arbitrator, retired judge Michael Marcus in Los Angeles, according to Bertoldi.
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Uber hailed Marcus’s decision as a defense of its business model.
“We are very pleased by Judge Marcus’s decision, which was a well-reasoned decision based on an extensive review of facts of the case and analysis of the relevant case law,” San Francisco-based Uber said in a statement. “It’s clear he understands the Uber model, and we have long argued that drivers using the Uber app are correctly classified as independent contractors.”
Last year the U.S. Court of Appeals in San Francisco ruled that Uber could require most drivers to go to arbitration instead of court. That gave the company the upper hand in a hard-fought lawsuit on behalf of 385,000 current and former drivers in California and Massachusetts over claims they should have the rights and benefits of employees rather than independent contractors.
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It also gave Uber leverage with drivers suing to upend its gig-economy workforce model in other states, where labor laws tend to give companies more leeway than in California. The company also faces lawsuits over its pricing and business practices, as well as efforts by local regulators to force it to comply with laws covering taxis.
Arbitration awards in California generally get confirmed unless there’s evidence of some egregious misconduct, said Nicholas Rozansky, a lawyer with Brutzkus Gubner Rozansky Seror Weber LLP in Woodland Hills, California.
The state court judge considering the arbitration decision Monday likely won’t second-guess the findings, Rozansky said. Any appeals court review wouldn’t go beyond procedural challenges, he said.
“This is a highly regarded, fair and reasonable arbitrator, and Uber will likely hold up this decision in other cases,” Rozansky said.
The case is Uber Technologies Inc. v. Y.E., BS166561, Los Angeles County Superior Court.
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