Uber Tries to Stall Driver Pay Trial Armed With New Order

  • Company is fighting expansion of case to cover 240,000 drivers
  • Trial judge has pushed to stay on schedule for June 20 trial

Uber Technologies Inc. is again seeking to freeze a lawsuit set for trial in June over driver pay after persuading an appeals court to review a critical dispute in the case.

The ride-sharing company said in a court filing Wednesday that the trial should be put on hold because an appeals has agreed to consider its argument that a judge erred by permitting more drivers to sue as part of the group.

A halt to proceedings would buy Uber more time to challenge a December ruling that expanded the class action to cover almost a quarter-million California drivers seeking to be treated as employees rather than independent contractors. The ruling added hundreds of millions of dollars in potential liability for Uber over claims that the drivers should be reimbursed for years of expenses and tips.

The appeals court’s willingness to hear the company’s arguments, spelled out in a one-paragraph order April 5, may trump the judge’s desire to stick with his schedule for a five-week trial starting June 20, said Charlotte Garden, an associate professor at Seattle University School of Law. The appeals court in November had refused to hear Uber’s challenge to a September order granting class-action status in the case.

“This is certainly a significant development, and an unwelcome one for the plaintiffs,” Garden said in an e-mail. While the U.S. Court of Appeals in San Francisco didn’t explain its reasoning, the three-judge panel may have agreed to review the December ruling to “alleviate some of the pressure to settle” the case “because of the sheer size of the class and the amount of liability that Uber is facing,” she said.

Uber’s Valuation

Authorities across the country are grappling with how companies in the so-called sharing economy operate within the confines of rules crafted for more traditional operations, and the California drivers’ case is one of the biggest and most advanced challenges to the business model. A loss for Uber at trial could put its valuation -- now more than $60 billion -- at risk.

Matt Kallman, an spokesman for Uber, said the company had no comment beyond the court filing.

Shannon Liss-Riordan, a lawyer representing the drivers, didn’t immediately respond to a call and an e-mail seeking comment on Uber’s request.

U.S. District Judge Edward Chen ruled in December that the company’s contract with its drivers improperly required them to resolve disputes through arbitration, preventing them from suing. The decision expanded the group suing Uber to 240,000 drivers, according to court filings.

Chen said on Dec. 22 he won’t issue a final judgment affecting most drivers in the case following a trial if the challenge to his order hasn’t been resolved on appeal.

Chen has allowed all drivers covered by the case to seek reimbursement for expenses, including as much as 57 1/2 cents for every mile driven, as well as gratuities.

Uber asked for a ruling on its request as soon as possible without a hearing, saying “the parties and the court are currently devoting a tremendous amount of time and energy to preparation for the June trial -- a trial that could be rendered unnecessary by a resolution of the pending appeal in Uber’s favor.”

The appeals court case is O’Connor v. Uber Technologies Inc., 15-80220, 9th Circuit U.S. Court of Appeals (San Francisco). The lower-court case is O’Connor v. Uber Technologies Inc., 13-cv-03826, U.S. District Court, Northern District of California (San Francisco).

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