Uber Suffers Setback in Drivers' Class-Action Lawsuit

A class-action lawsuit against Uber by drivers who claim they are employees and not independent contractors will be expanded to include thousands of additional drivers, a federal judge ruled Wednesday.

Judge Edward Chen certified the lawsuit as a class action in September, but excluded drivers who signed recent contracts and did not opt out of an arbitration agreement.

At the time, an Uber spokeswoman interpreted the certification as affecting only "a tiny fraction of the class that the plaintiffs were seeking.”

But Chen said the arbitration clause is unenforceable and expanded the suit to include all UberBlack, UberX and UberSUV drivers who signed up to drive with the company at any time since 2009. Limousine drivers were not included.

The judge also certified as a class action the drivers' attempt to get reimbursed for vehicle-related and cellphone expenses.

Shannon Liss-Riordan, the Boston labor attorney who filed the suit, said drivers who signed recent contracts "unknowingly" accepted the arbitration clause. She called Chen's ruling significant and said it "will allow many thousands more Uber drivers to be covered by this case."

The suit could affect up to 160,000 Uber drivers in California and, if successful, potentially up-end the company's business model of relying on independent contractors who pay their own expenses.

The drivers argue they should be classified as employees. That would require Uber to withhold taxes and pay for unemployment, Social Security and workers' compensation.

In a written statement, an Uber spokeswoman said the company would immediately appeal Chen's ruling.

"As employees, drivers would lose the personal flexibility they value most -- they would have set shifts, earn a fixed hourly wage and be unable to use other ridesharing apps," she said.

A jury trial in the case has been set for June.