Judge Orders Uber to Limit Communication With Drivers in Lawsuit

Adnan Aloudi, a full-time Uber and Lyft driver, drops off a customer in downtown San Francisco in August.  (Ericka Cruz Guevarra/KQED)

A San Francisco federal judge has ordered Uber to limit communication with drivers who are part of a class-action lawsuit against the company, saying he had "grave concerns" about arbitration agreements the company sent out last week.

U.S. District Court Judge Edward Chen said the agreements are "likely to engender confusion" and that he would issue an order preventing them from taking effect for drivers who are part of the lawsuit. However, Chen added that he wasn't sure he had the "complete authority" to ban arbitration agreements.

The tentative rulings are the latest in the class action against Uber, which argues the company misclassifies drivers as independent contractors instead of employees. The drivers are also seeking reimbursement for expenses, including gas and car maintenance, along with tips they claim were advertised to customers as part of the fares but not given to drivers.

Chen said he was directing Uber not to communicate "with class members or anything that might affect the prosecution of this case without clearing it through counsel or coming to the court if there's a disagreement."

Uber sent out the new arbitration agreements last Friday, two days after Chen issued a ruling expanding the class of drivers who could be part of the lawsuit. He ruled 2014 and 2015 arbitration agreements were unenforceable, which meant drivers who opted out of those clauses could be included in the lawsuit. Uber is appealing the ruling.

Sponsored

Theodore Boutrous, the attorney for Uber, estimated that up to 100,000 drivers were added to the class, joining 8,000 drivers certified by Chen on Sept. 1. The case could affect up to 160,000 Uber drivers in California, and Chen said he would rule later on how last week's agreements might affect other drivers.

The attorney for the drivers, Shannon Liss-Riordan, said the agreement and email sent to drivers last week was an attempt by Uber to curtail its liability in pending lawsuits. She argued Uber was trying to "potentially trick" drivers  into opting out of the class-action suit.

In legal briefs, Liss-Riordan wrote that her firm received more than 800 inquiries from Uber drivers "who have expressed confusion and dismay about the new agreement, and do not know if they need to opt out of the agreement to participate in the case."

Boutrous argued that the new agreement was a reaction to Chen's concerns about the arbitration clauses in Uber's earlier driver contracts.

"[An] agreement was sent out that this court was troubled by, and it fixes those things," Boutrous told Chen. "These aren't some nefarious, evil agreements that must be stopped."

In his legal briefs, Boutrous wrote that "there is nothing deceptive, coercive, or misleading about the agreements Uber has implemented (and drivers voluntarily accepted). Indeed, Uber did not amend, in any substantive way, any of the notice provisions or opt-out mechanisms that this court previously approved."

Boutrous said that a higher number of drivers have opted out of the new arbitration agreement compared with earlier contracts. Liss-Riordan attributes that to widespread news coverage and drivers finding out about the lawsuit from her firm.

Chen suggested that Uber provide more "robust disclosure" by providing a hyperlink on the first page of the agreement that clearly gives drivers an opt-out option.

"If it's to truly implement a fair model, why not have a simple click the box and not have it on page 21?" Chen asked.

Liss-Riordan also challenged a recent effort by Uber to prove its drivers believe they're independent contractors.

The company has begun offering money to drivers for proof they also work for other ride services, such as Lyft. Liss-Riordan called the payments part of a "deceptive attempt by Uber to gather evidence in support of its defense in this case -- and against the interests of the class -- in exchange for payment."

Boutrous told Chen the driver information is being gathered for market research.

"The company gathers information about its competitor, and this email was sent to a fraction of California drivers seeking information about their experience with Lyft," he told Chen.

Meanwhile, Liss-Riordan filed a motion Thursday seeking to have the case tried by the judge instead of a jury.