In O’Connor v. Uber Technologies, Inc. (Filed 09/01/2015, No. C-13-3826 EMC), the United States District Court, Northern District of California, certified a class of approximately 160,000 current and former drivers of Uber in California, who contend they were misclassified as independent contractors during their employment.
Plaintiffs are current or former drivers for Defendant Uber Technologies, Inc. (“Uber”). Plaintiffs alleged that Uber failed to reimburse its drivers for all necessary expenditures or losses incurred by them in direct consequence of the discharge of duties (Labor Code §2802), and failed to pass on the entire amount of any customer tip paid, given to, or left for an Uber driver (Labor Code §351).
In an extremely detailed 68 page opinion, the District Court certified the class of plaintiffs with respect to the unpaid tips claim pursuant to Labor Code §351, but denied certification as to the claims for unpaid reimbursements under Labor Code §2802.
The District Court held that the Rule 23(a) criteria was satisfied with respect to the claim for unpaid tips and gratuities. First, the District Court noted that the class was objectively ascertainable from Uber’s business records which would reveal the names and addresses of its drivers during the class period. Second, the Court held the numerosity requirement was satisfied because the putative class involved approximately 160,000 individuals. Third, the commonality requirement was met because “one common question important to resolving Uber’s liability for the Tips Claim on a class wide basis is whether Uber ever actually remitted tips to its drivers.” Fourth, the Court held the typicality and adequacy requirements were satisfied because the named Plaintiffs’ claims were typical of the tip claims of the class as a whole. Fifth, the Court concluded that the predominance factor was met because two main issues predominate each and every individual claim: (1) whether the driver was an employee or independent contractor; and (2) whether Uber received tips from patrons which it failed to remit to its drivers. Finally, the District Court held the superiority requirement was met based on the size of the class, the common issues involved, and the ability of class members to opt-out.
As to the claims for unpaid expense reimbursements under Labor Code §2802, the District Court concluded that the commonality and adequacy factors were unsatisfied by Plaintiffs. Specifically, the District Court held “there may be substantial variance as to what kind of expenses were even incurred by [the putative employees] in the first place.”
The District Court’s Order may greatly impact California consumers, Uber drivers, and drivers of other similar enterprises. Going forward, the most critical issue in the case is whether Uber can rebut the presumption that the drivers are “employees” under California law. Should the class plaintiffs prevail on this issue, California consumers can likely expect a fee increase in Uber rides.
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