District Judge Rules Uber's Arbitration Agreements Unenforceable On Public Policy Grounds

On September 2, we addressed the much-publicized O'Connor v. Uber Technologies, Inc. case (No. 13-cv-03826-EMC) pending before the U.S. District Court for the Northern District of California. In O'Connor, a group of 160,000 current and former drivers contend that they were Uber's employees rather than independent contractors and hence entitled to protections provided by the California Labor Code. Specifically, the Plaintiffs raised claims for expense reimbursement and converted tips under the California Labor Code.

Now the court has issued a 32-page Order granting in part and denying in part the Plaintiff employees' Supplemental Motion for Class Certification. One problematic component of the Order is Judge Edward Chen's determination that Uber's arbitration agreements with Private Attorneys General Act (PAGA) waivers are unenforceable as a matter of public policy. The Order illustrates some of the pitfalls surrounding the creation of enforceable arbitration