Pay-Hungry Uber Drivers Hobbled by High Court Arbitration Ruling

(Bloomberg) -- Drivers for Uber Technologies Inc. in a long-running battle to be treated as employees took a big hit from the U.S. Supreme Court in a ruling that will probably force most of them to fight the ride-hailing behemoth one-on-one.

Almost a quarter-million California drivers won class-action status in 2015 and were headed toward a jury trial in San Francisco over claims that Uber wrongly classified them as independent contractors and owed them reimbursement for years of expenses and tips. But Uber fended off the trial, contending that the vast majority of drivers were required to go individually through private arbitration.

Monday’s ruling by the high court that employers can enforce arbitration agreements signed by workers, even if those accords bar group claims, didn’t directly address the Uber fight. But it’s “bad news” for the Uber drivers, said Charlotte Garden, a law professor at Seattle University. The Supreme Court decision “rejected the remaining argument that could have invalidated the individual arbitration agreements that the vast majority of drivers accepted -- whether they knew it or not -- when they signed on to work for Uber.”

Garden predicted the high court’s decision will probably lead an appeals court that’s handling the Uber litigation to conclude that the class action can proceed only on behalf of a few thousand drivers who opted out of the arbitration agreements when they went to work for the company.

Shannon Liss-Riordan, a lawyer for the drivers, said she wasn’t surprised by the ruling and will pursue individual arbitration for many drivers. She also said she’ll try to salvage class-action status in the appeals court by arguing that the group can be deemed to have “rejected arbitration” because the drivers leading the lawsuit opted out of the process.

Uber spokesman Matt Kallman didn’t immediately respond to an email seeking comment.

--With assistance from Greg Stohr.

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net, Peter Blumberg

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