Uber Can’t Force Drivers to Arbitration

SAN FRANCISCO (CN) - Uber cannot force its drivers to arbitrate class action claims of "unconscionable" contracts, but must defend itself in court, a federal judge ruled Wednesday.

U.S. Judge Edward Chen called Uber's online services agreement with its drivers unconscionable, and refused the company's motions to compel arbitration.

Chen ruled that Uber's opt-out clause for arbitration was buried in fine print and unenforceable.

"The opt-out provision was printed on the second-to-last page of the 2013 agreement, and was not in any way set off from the small and densely packed text surrounding it," Chen wrote.

Drivers had to hand-deliver or overnight the contracts with the buried opt-out clause to Uber's office in San Francisco. Chen struck down Uber's claim that several drivers did opt out of the arbitration agreement, saying it provided no evidence to back that claim.

Former Uber contractors Abdul Kadir Mohamed and Ronald Gillette sued Uber in November 2014, claiming they were suddenly denied access to the Uber system without reason. Mohamed claimed Uber told him he could no longer drive after two years with the company because it found new information in his background check, which it never showed him.

Gillette accused Uber of failing to pay employees promptly upon termination and misclassifying drivers as independent contractors.

Numerous lawsuits across the country claim that Uber misclassifies its drivers as contractors rather than employees.

Uber claims that when drivers sign the online services agreement, they agree to an provision that requires disputes to be settled in "final and binding arbitration and not by way of court or jury trial," and that the plaintiffs signed the contract willfully without using the opt-out clause.

While Chen agreed that the former drivers knowingly signed the contract, he found several issues with Uber's legalese and found the arbitration provisions unenforceable. He wrote that for Uber's arbitration provisions to be legal, it must disclose to drivers the disadvantages of giving up the right to a jury trial.

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