San Francisco, CA (WorkersCompensation.com) – A ruling by the 9th Circuit Court of Appeals means business as usual for service-for-hire companies like Uber, experts in the industry say.
At the end last month, the 9th US Circuit Court of Appeals reversed a lower court’s ruling and will now require gig workers to sue companies individually if they fear they have been misclassified.
The case centered around a class action lawsuit against Uber where drivers complained that the ride sharing company had misclassified them as independent contractors instead of employees. The lawsuit said Uber made the decision to avoid having to pay for benefits, like workers’ compensation insurance and unemployment insurance, as well as avoid reimbursing them for expenses like gasoline and car maintenance.
In the 9th Circuit Court’s ruling, the court overturned the suit’s classification as a class action lawsuit. Instead it upheld that drivers needed to sue individually, and were subject to arbitration.
In the decision, Circuit Judge Richard Clifton said arbitration was necessary in light of a US Supreme Court case, Epic Systems Corp v. Lewis, that companies could compel workers into arbitration to settle workplace issues.
Shannon Liss-Riordan, a lawyer for the drivers, said the ruling was anticipated.
Liss-Riordan said that she may pursue an 11-judge appeals court panel to revisit the case, but that thousands of drivers are taking action toward individual arbitrations in the meantime.
“If Uber wants to resolve these disputes one by one, we are ready to do that — one by one,” she said.
Mark Absher, in-house counsel with online gig sharing platform ShiftPixy, said the ruling will make it easier for gig economy employers, like Uber, to defend themselves in classification cases.
“When I moved to California, it seemed like every case where an employer may have done something wrong, was turned into a class action case,” he said in an interview with WorkersCompensation.com. “This will allow employers to go bind workers to arbitration and keep these disagreements over issues out of the courts.”
While it could impact employers, it is not likely to impact gig economy employers, he said. Many companies, like Uber and GrubHub, use contractors to perform services, which eliminates the need to adhere to fair labor laws.
ShiftPixy, Absher said, considers its gig workers as employees, unlike most other gig economy companies.
Absher said protecting gig economy workers would likely not come from companies like Uber and GrubHub, but from Congress and state legislators.
Without action on a state and federal level, he said, gig economy workers continue to work without the same federal protections as employees.