Uber's New Contract Restricts Drivers' Right To Join Lawsuits About Whether They Are Employees or Not

The consecutive court rulings that Uber drivers are employees rather than contractors is a ticking time bomb for Uber's business model and valuation. It's latest attempt to restrict drivers' legal rights suggests that the company - and its investors - are feeling the pressure.JL

Joel Rosenblatt reports in Bloomberg:

Uber’s re-worded agreement to “get around the court’s decision,” which likely added the vast majority of Uber’s 160,000 California drivers and hundreds of millions of dollars in damages to the case is an attempt to circumvent the court’s ruling by a new arbitration agreement that will prevent drivers from seeking to enforce their rights under the wage laws in this case.
Uber Technologies Inc. is asking its U.S. drivers to sign a re-worded contract that restricts their right to sue in an escalation of a battle over whether they should be treated as employees.
The ride-share company started circulating the new work agreements Friday, two days after a federal judge’s decision vastly expanded a California class action over pay and benefits. The judge ruled Uber improperly required tens of thousands of drivers to resolve disputes through arbitration instead of in court.
Drivers were told by Uber Friday that they must sign the new agreement to continue working for the company but that they can opt out of certain provisions.

Shannon Liss-Riordan, a lawyer for the drivers, called Uber’s re-worded agreement an attempt to “get around the court’s decision,” which legal experts said likely added the vast majority of Uber’s 160,000 California drivers and hundreds of millions of dollars in damages to the case.
“It is entirely improper for Uber to attempt now to circumvent the court’s ruling by distributing a new arbitration agreement that will once again try to prevent drivers from seeking to enforce their rights under the wage laws in this case,” Liss-Riordan said.
She filed an emergency request Friday with U.S. District Judge Edward Chen in San Francisco to block Uber from enforcing the new arbitration agreement.

‘Certified Class’

Uber, meanwhile, says the agreement was endorsed Thursday by Chen, and that the company isn’t aiming to enforce provisions in the new agreement against drivers "who are part of any certified class."

Despite what Uber says, the new agreement prohibits drivers who don’t opt out from participating in pending class actions -- and that would include the case now before Chen, said Charlotte Garden, an associate professor at Seattle University School of Law.
"At a minimum, Uber is trying to make sure that no further drivers can be included in this class," Garden said after reviewing the contract.
If the judge suspects Uber is trying to end run his Wednesday ruling, he may issue an order saying drivers who are already part of the case can’t be excluded if they sign the new agreement, Garden said.
Chen ruled that drivers in the class action can seek expense reimbursement, including as much as 57 1/2 cents for every mile driven, in addition to their claims for tips that were already part of the case. A trial is scheduled for June. A victory for the drivers seeking to be treated as employees instead of independent contractors threatens to upend the ride share company’s business model and cut into its more than $60 billion valuation.
“We believe strongly that our agreements are valid, but we are making some changes and clarifications to remove uncertainty for drivers and for us as we work through our multiple appeals on this issue,” Matt Kallman, an Uber spokesman, said in an e-mail.
The case is O’Connor v. Uber Technologies Inc., 13-cv-03826, U.S. District Court, Northern District of California (San Francisco).