My colleagues Andy Scott and Felix Digilov reported on last week’s Supreme Court decision that rejected a trucking company’s effort to force its drivers to arbitrate their wage and hour claims against the company, despite the fact they had signed otherwise enforceable arbitration agreements (New Prime Inc. v. Oliveira). The reasoning behind that ruling? The SCOTUS held that the Federal Arbitration Act’s exemption that excludes “contracts of employment of workers engaged in interstate commerce” includes not only interstate transportation workers with employment agreements, but also those interstate transportation workers with independent contractor agreements. Now, a prominent labor law commentator posits whether this same decision could cause trouble for Lyft, Uber, and other gig economy companies.
It was just a matter of time. After the Supreme Court cleared the way for businesses to use class waivers with their employees and contractors with the Epic Systems ruling this past May, many observers expected that the decision would come back to haunt a class of Uber drivers who wanted to litigate a class action misclassification case against the ride-sharing company in court. Earlier today, sure enough, the other shoe dropped.
When the Supreme Court decided this May that businesses were permitted to enter into class waiver agreements with employees and contractors, forcing them into individual arbitration proceedings over workplace disputes rather than having to be subjected to bloated and costly class action litigation, we called it a “monumental” decision that “saved employment arbitration as we know it.” For businesses in the gig world, we now have a definitive example of just how valuable the SCOTUS’s new standard can be when it comes to misclassification cases.
The 9th Circuit Court of Appeals recently placed a temporary halt on the ongoing misclassification litigation against Uber, pointing out that it would make sense to wait for a key Supreme Court decision before proceeding further. The order gives the parties a bit of breathing room and allows them to retreat to their neutral corners for a temporary reprieve from the grind of class action litigation, but it is only a temporary pause. Once the ruling comes down from the SCOTUS, the combatants will be right back at it.
With the recent confirmation of Neil Gorsuch, the Supreme Court is now back up to its full complement of nine justices. While the current Court term has largely been devoid of blockbuster workplace law decisions – which could be the product of the sitting justices not wanting to resolve significant cases with only eight members – observers are already looking forward to what many believe will be a scintillating 2017-2018 term. The Court has already agreed to rule upon whether mandatory class action waivers are valid in an employment context, and we could also see action on sexual orientation discrimination claims and a re-visitation of the crucial agency shop fee conflict beginning in October 2017.
There’s a great scene in the Naked Gun movie where Lieutenant Frank Drebin (Leslie Nielsen) is trying to clear a crowd forming around a crime scene, except that the crime scene happens to be a fireworks factory on fire. While a massive pyrotechnic fireworks show is going on behind him, Drebin vainly yells to the gathering crowd, “Move along! Nothing to see here! Please disburse! Nothing to see here!”