Judge Denies Injunction Calling Uber Drivers Employees and Granting Them Paid Sick Leave

A California judge has denied a preliminary injunction in a lawsuit filed by a group of Massachusetts-based Uber drivers that the ridesharing service should reclassify the drivers as employees and offer them paid sick leave so that they don't risk spreading COVID-19 to passengers.

The denial issued by Judge Edward M. Chen of the U.S. District Court for Northern California leaves the drivers to individually arbitrate their claims directly with legal representatives from Uber. The workers' attorney Shannon Liss-Riordan has pledged to appeal to the U.S. Court of Appeals for the Ninth Circuit.

Uber currently classifies its drivers as independent contractors even though numerous drivers work more than 40 hours a week. Thus far, no American courts have ruled on whether ridesharing companies have any obligation to reclassify its workers as employees.

John Capriole, one of the claimants in the case, says that Uber prefers to classify its workers as independent contractors so that the company can avoid paying minimum wage and overtime, reimbursing business expenses and providing other employee benefits like paid leave, according to Bloomberg News.

However, there are cases currently under consideration by the First, Seventh, and Ninth Circuits Courts which could help address whether gig workers may pursue class action claims in court, rather than be compelled to individual arbitration.

Uber driver
After dropping off passengers at a Broadway play, Johan Nijman, a for-hire driver who runs his own service and also drives for Uber on the side, drives through the West Side of Manhattan on Wednesday evening, August 8, 2018 in New York City. Drew Angerer/Getty

Newsweek reached out to Uber for comment. This story will be updated with any response.

Even though the Federal Arbitration Act (FAA) has an exception allowing transportation workers to seek legal recourse through civil courts rather than arbitration, the court ruled that the FAA's exception doesn't apply to Uber drivers in this case.

Chen's court ruled that Uber drivers are not covered by the exception because they rarely cross state lines and because the court held that driving passengers to airports is not part of interstate commerce.

"The Supreme Court has for years been allowing companies to get out of having to face any systemic challenges to their misclassification of their workers by enforcing arbitration," Liss-Riordan told Newsweek.

She added that Congress could also act to overturn court rulings so that gig economy workers can start seeking back pay and other benefits in court.

Capriole and the other drivers' case was originally filed in a Massachusetts federal court, but a forum selection clause in Uber driver agreements compelled Judge Indira Talwani to allow Uber to move the suit to Judge Chen's court.

"It is hard to believe that these companies can continue to evade the law and deny sick pay to their employees, even in the midst of a global pandemic, by pointing to their arbitration clause," Liss-Riordan said.

"Even the Supreme Court has not sanctioned—or confronted—such a stark situation in which an arbitration clause shields a company from complying with the law and thereby harming the public at large by exacerbating a national health crisis," Liss-Riordan added.

Correction 5/14/2020, 8:45 p.m.: The headline of this article was updated to reflect that the judge did not rule on Uber drivers' employment status, but merely denied the injunction.

Judge Denies Injunction Calling Uber Drivers Employees and Granting Them Paid Sick Leave | U.S.