Federal Court Says Uber Can Appeal Class-Action Suit Filed by California Drivers

A San Francisco federal appeals court says Uber can appeal the class-action status of a lawsuit filed by drivers that challenges their status as independent contractors and argues they should be employees instead.

The Ninth U.S. Circuit Court of Appeals on Tuesday agreed to hear the appeal in June, around the same time the federal suit by Uber drivers is slated to go to trial. However, Uber's lawyers are now seeking to delay it.

In their appeal, the company's lawyers argue that a ruling by U.S. District Court Judge Edward Chen granting class-action status to more than 150,000 Uber drivers in California violated federal arbitration rules.

They say nearly all of those drivers agreed not to participate in the class action and to instead arbitrate disputes on an individual basis, but Chen ruled the arbitration clauses were unenforceable, and eventually agreed to expand the class from 8,000 to 150,000 drivers.

"The district court ran roughshod over Uber's arbitration agreements and set this case for an improper class trial," Uber's lawyers argued in their brief, calling the ruling "deeply flawed."

In a statement, an Uber spokesman said: "We are pleased that the Ninth Circuit has granted this petition to review the lower court's order."

Uber lawyers have appealed six of Chen's decisions, and say that if any of them succeed, the class-action certification rulings would "crumble."

In her response, Shannon Liss-Riordan, the labor attorney representing the drivers, said the appeal was unnecessary, considering Uber has already appealed similar rulings.

"The Court should object to Uber's backdoor attempt to stay proceedings in this case," she wrote, and "allow Uber's existing appeals to sort out the ultimate scope of class while the case proceeds to trial."

On Wednesday, Uber filed a motion asking Chen to put the trial on hold until the appeal is decided, and confidently claimed "it is likely to succeed."

In December, Chen ordered Uber to limit communication with drivers who are part of the lawsuit, saying revised arbitration agreements that the company sent out were likely to "engender confusion."

The company issued the agreements two days after Chen agreed to expand the class of drivers.

The lawsuit by California Uber drivers, filed in August 2013, argues that they are employees, entitled to business expenses that include gas and vehicle maintenance costs.

If the suit is successful, it could put a damper on Uber's business model of relying on drivers as independent contractors who pay their own expenses.