September 30, 2015 Practice Points

Rethinking Commonality: Class Certification for Uber Drivers

Uber's argument that employment classification should not be adjudicated on a class-wide basis was rejected

by Max Hirsch

In O'Connor et. al v. Uber TechnologiesInc., No. C-13-3826 EMC, 2015 U.S. Dist. LEXIS 116482 (N.D. Cal. Sept. 1, 2015), the United States District Court for the Northern District of California recently certified a class of current and former Uber drivers on the issue of their classification as employees or independent contractors. In doing so, the court rejected Uber's argument that employment classification should not be adjudicated on a class-wide basis.

In O'Connor, the Uber drivers brought a class action (consisting of approximately 160,000 UberBlack, UberX, and UberSUV drivers) contending that the drivers are employees of Uber, not independent contractors. The plaintiffs argued that an employee is entitled to various protections under the California Labor Code, specifically reimbursement of necessary expenditures and losses incurred "in direct consequence of the discharge of his or her duties" and a right to the entire amount of any tip or gratuity. O'Connor, 2015 U.S. Dist. LEXIS 116482 at *6. In answering whether a Uber driver is an employee or independent contractor in the context of motion for class certification, the court focused on whether "questions of law or fact common to class members predominate over any questions affecting only individual members of the proposed class." Id. at *7 (internal citations and quotations omitted). Uber argued that employment classification should not be adjudicated on a class-wide basis, as Uber's control over drivers and the day-to-day reality of its relationship with drivers are not uniform across the proposed class. Id. at *7–8.

While noting that individualized inquiries may predominate for drivers who did not opt-out of Uber's most recent arbitration clauses, the court disagreed with Uber and certified a class of current and former Uber drivers with respect to the issue of the class members' proper employment classification. After setting forth the four prongs of the Rule 23(a) of the Federal Rules of Civil Procedure class certification standard, the court examined those requirements to determine whether the plaintiffs had met the standard. The court quickly found the ascertainability and numerosity requirements satisfied, and accordingly turned its focus to commonality. Id. at *21–25. The court concluded that there "are numerous legally significant questions in this litigation that will have answers common to each class member that are apt to drive the resolution of the litigation," including "whether all class members should be classified as employees or independent contractors . . . ." Id. at *25. The court relied on Ninth Circuit authority that holds that "commonality is met when the proposed class of plaintiffs asserts that class members were improperly classified as independent contractors instead of employees." Id. at *26–27 (internal citations and quotations omitted). Finally, for the typicality and adequacy prong, while Uber argued there was "no typical Uber driver," the court found the differences highlighted by Uber as "legally irrelevant," thus ruling that the plaintiffs had satisfied all four prongs of Rule 23(a). Id. at *34.

Lastly, the court concluded that the Rule 23(b)(2) requirement of predominance was also satisfied, explaining that when "evaluating predominance with respect to California's common-law test of employment, the court must determine whether the elements necessary to establish liability [here, employee status,] are susceptible to common proof . . . ." Id. at *58 (internal citations and quotations omitted). So the question the court had to answer was whether there was "a common way to show that Uber possessed essentially the same legal right of control with respect to each of its drivers . . . ." Id. at *59 (internal brackets omitted). The court concluded there was predominance because Uber held the same level of control over driver schedules, routes, pay, training, driver rating, termination without cause, and the ability to work for third parties (along with all of the secondary factors described in S. G. Borello & Sons, Inc. v. Dept. of Indus. Rel., 769 P.2d 399 (Cal. 1989)). While on the merits some of the Borello factors could arguably support the plaintiffs' position while others support Uber's position, the court determined that "all [factors] favor certification." Id. at *112. Accordingly, the court held that the employment classification issues could be adjudicated on a class-wide basis.

Max Hirsch is with Skadden, Arps, Slate, Meagher & Flom LLP in Los Angeles, California.


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