Uber Technologies Inc [UBER.UL] partially won a ruling that could potentially put a hold on the outcome of a lawsuit against the ride service, placed by California drivers over their employment status.
U.S. District Judge Edward Chen granted a “conditional stay of entry of final judgment” to his Dec. 9 ruling and said he would not issue a final ruling, in case his decision to include over 100,000 drivers to the class action has not been resolved on appeal. (1.usa.gov/1J3O0qW)
In his ruling on Dec. 9, the judge stated that many more Uber drivers in California can participate in a class action against the ride service over their employment status, even if they did not opt out of an arbitration clause in their contracts.
Earlier this year, Chen said Uber drivers must have opted out of arbitration to be class members. At the time, Uber said the ruling meant only a “tiny fraction” of a potential 160,000 California drivers would be eligible to be class members.
Class action status generally gives plaintiffs more leverage to negotiate a settlement.
The issue came up when three Uber drivers sued Uber in San Francisco federal court, contending they are employees and entitled to reimbursement for expenses, including gas and vehicle maintenance. The drivers currently pay those costs themselves.
An ultimate finding that drivers are employees could raise Uber’s costs beyond the lawsuit’s scope and force it to pay Social Security, workers’ compensation, and unemployment insurance.
Uber and other companies, including Lyft and Handy, say the contractor model allows for flexibility that many see as important to their success.
Reuters could not immediately reach Uber Technologies for comment outside regular U.S. business hours.
The case is Douglas O’Connor et al v. Uber Technologies Inc, U.S. District Court, Northern District of California, No. 13-3826.
(Reporting by Sneha Teresa Johny in Bengaluru; Editing by Sunil Nair)