Why Forced Arbitration Matters: Uber as a Poster Child

This session, the Supreme Court will rule on an issue with huge repercussions for our most basic civil and workplace rights: Whether employers can forbid collective and class actions and force workers into individual arbitration proceedings.

The ongoing legal and ethical troubles plaguing the ride-sharing giant Uber illustrate the far-reaching effect this case will have on workers’ ability to challenge big corporations.

Sexual Harassment and Toxic Corporate Culture

Susan Fowler’s famous blog post outlined Uber’s toxic corporate culture and her experiences with sexual harassment and gender discrimination at the company. But like other Uber employees, she was unable to sue her employer in court, or to join together with her peers to fight discrimination in a class action suit. As Fowler details in a friend-of-the-court brief, that’s because as a condition of employment, Fowler and other Uber employees were required to sign an arbitration clause that contained a class action ban—which left Fowler with few options after moving through an inattentive human resources apparatus and calling out the company publicly in her post.

Fowler’s experiences, like those of Gretchen Carlson at Fox News, underscore the particular importance of class actions in addressing employees’ grievances when businesses break civil rights laws (including gender discrimination laws)—both because joining together as a class helps to offset the power imbalance between workers and employers, and because class actions, unlike arbitration proceedings, take place in the public eye, where their outcome can influence public opinion and shape future cases.

Whether Workers Are Employees At All

But it is not just Uber’s corporate employees who are signing their rights away—Uber routinely defends against claims presented by drivers whom the company forced into arbitration.

In one case currently pending in the Ninth Circuit Court of Appeals, drivers in four separate lawsuits are challenging Uber’s failure to pay proper wages to workers and to comply with background check laws. A lower court has already invalidated several arbitration agreements that Uber used in the past. But backed by a powerful legal team, Uber has appealed the losses and been able to keep judges from ruling on the merits of the drivers’ claims.

Uber’s use of class action bans and forced arbitration clauses is particularly problematic for its drivers, because these provisions are a core tactic in the company’s continued crusade to ensure that it doesn’t have to treat its drivers as employees.

From their inception, Uber and other app-based transportation companies have used their considerable legal might to shirk their responsibilities as employers, maintaining that drivers are independent contractors and not direct employees.

But Uber drivers are plainly not in business for themselves. As a growing chorus of state workers’ compensation and unemployment agencies have found, Uber’s extensive control over its workforce clearly indicates that its drivers are employees, and not contractors.

Nevertheless, Uber continues to fight to avoid giving drivers what they are owed as employees. Forcing drivers to accept class action bans and forced arbitration clauses is an essential tactic in that fight. The fine-print language that drivers sign when they start using the app makes it much harder for them to take their cases before judges or juries, or to join together with peers who may have similar claims.

Beyond drivers’ individual cases, keeping the question of whether Uber drivers are employees out of the courts—and in private arbitration proceedings—prevents our legal system from conclusively ruling on the status of workers in this growing sector of our economy, an ambiguity Uber is deeply invested in maintaining, any way it can.

When the Supreme Court rules this term on the legality of collective and class action bans in workplace forced arbitration clauses, its decision will affect workers across the country who, as employees, have certain basic rights and expect to have their day in court when their rights are violated. But it will also have a tremendous impact on a large class of workers who are left behind, because their employer won’t acknowledge that they have workplace rights at all.

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