Uber’s ‘Happy Campers’ Could Derail Labor Suit

     SAN FRANCISCO (CN) – The fate of mobile ride-hailing upstart Uber rests with a federal judge who will soon decide if a class action accusing the company of misclassifying drivers as independent contractors can go forward.
     At a hearing Thursday, Uber attorney Theodore Boutrous, a partner at Gibson Dunn who recently came on to the case after Uber fired its legal team at Morgan, Lewis & Bockius, said Uber’s drivers are simply too diverse to be grouped into one class.
     Meanwhile, attorneys for the proposed class have argued that 160,000 drivers are all subject to the same control by Uber regarding how they do their jobs.
     The 2013 lawsuit brought by former drivers claims they were misclassified as independent contractors and thereby required to pay for their own gas, vehicles and maintenance. They also allege that Uber falsely tells riders that a 20 percent gratuity is included in the fare, but fails to pass along the full share of tips to drivers.
     The case is a high-stakes one for Uber, whose business model rides on its drivers retaining contractor status. A reclassification of drivers as employees would put Uber on the hook for paying payroll taxes, along with back wages and benefits for drivers.
     Boutrous said class certification shouldn’t hinge on a single factor. “There are factors you simply cannot decide in one fell swoop across the class,” he told U.S. District Judge Edward Chen. “If the court certified a class of 160,000 I think we’d have really strong arguments that would win because plaintiffs have taken all their chips and pushed them on one square.”
     Boutrous argued similarly, and successfully, in Wal-Mart v. Dukes, a proposed class action that ultmately made it to the U.S. Supreme Court, but was struck down because the 1.5 million female employees lacked a common complaint.
     The fundamental problem, Boutrous said, is that the three former Uber drivers who are seeking to represent the class don’t reflect the views of the majority of Uber’s workforce. He pointed to 400 declarations saying they didn’t want to be classified as employees.
     “That’s impressive, but when you pit that against 160,000 class members its 0.25 percent,” Chen said. “How probative is that?”
     Chen added, “You’re always going to get some people who don’t agree. There are public interests that transcend any individual views. You cannot allow a group of happy-camper declarants to control.”
     Boutrous bristled at this. “We had people lined up outside the door. To call them happy-camper declarations, that’s condescending. These are adult business people, sophisticated business people and this case is going to have a significant impact on their lives.”
     Plaintiff attorney Shannon Liss-Riordan said her side could have easily gathered their own stack of declarations, but “this isn’t a popularity contest. It’s not a question of what people want.”
     Liss-Riordan, with the Boston firm Lichten & Liss-Riordan, famously won a labor classification case against FedEx in Massachusetts. She has also successfully represented a class of Massachusetts strippers who were classified as contractors, denied minimum wage and forced to pay club owners for their shifts.
     On Thursday, Liss-Riordan said her paralegal spoke with 1,700 drives from around the country, more than half from California, and that 50 of Boutrous’ 400 later recanted and said they would like to be reimbursed for their expenses after all but feared retaliation from Uber if they signed their names to public documents attesting to this.
     But Chen said what he was really interested in was not whether the three named plaintiffs are adequate class representatives, but the differences in Uber’s right to control its workers within the 17 different driver agreements Uber submitted.
     “There are a lot of things that seem to be allowed by the contract to what Uber can do,” Chen said. “I’d like to know where in the contracts you think there are differences in terms of restraining Uber’s right to control.”
     Some of these factors include the cleanliness of vehicles, Uber’s five-star rating feature on its app, what radio stations to play and even what drivers are allowed to say to customers.
     Chen declined to rule Thursday, but he can choose to certify a class of all California drivers or a smaller subclass. He can also deny certification altogether, and the case would proceed with the original plaintiffs against Uber.
     A decision is expected sometime after Aug. 12.

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