Last year, some Uber drivers lost their jobs after the ride-hailing app company decided to discontinue its transportation service in Austin, Texas. In response, the drivers decided to sue the company, but certain arbitration clauses prevented them from doing so. So, they approached a federal judge requesting a nullification of these clauses allowing a lawsuit to go forward against the company.
Todd Johnston, the lead plaintiff, sued Uber in June 2016, stating that the company violated the Workers Adjustment and Retraining Notification (WARN) Act when it suddenly stopped its operations in Austin, Texas. The reason Uber pulled out was that voters rejected a proposal to implement stringent fingerprinting background checks for drivers, part of the Uber-Lyft agreement.
During a hearing, attorney John Davis told a U.S. District Judge that the WARN Act has a provision where employees can file a class action against the employer. The WARN Act passed in 1988 with a margin of veto-proof without the approval of President Ronald Reagan. WARN states that companies with more than 100 employees should give at least 60 days notice before a mass layoff.
However, attorney Keith Jacoby who represents Uber commented that even though the WARN Act gives the right to workers to sue their employees, it does not override another statute, the Federal Arbitration Act, which describes the right to resolve disputes through private arbitration.
Commenting on the lawsuit filed by Johnston, Jacoby said the arbitration agreement is a choice made by the individual, and when the talk is around arbitration agreements, the hearing effectually has no meaning.
Last September, the Ninth Circuit overturned the ruling put forth by Edward Chen in a separate case, and ruled the arbitration agreements for Uber drivers in 2013-2014 were considered valid. This ruling had a tremendous spinoff on other multiple labor class actions against Uber. The dispute was around classification by Uber on drivers designated as contractors. This is what the drivers want to resolve before they make their claims on WARN Act violations.
Davis said regardless of the Ninth Circuit ruling, WARN Act violations must be contested in a district court and the right to pursue those claims cannot be waived.
Anirudh M. for TechFunnel.com