Sunday, September 11, 2016

Uber Arbitration Agreements Upheld

Last week, the Ninth Circuit Court of Appeals in the case of Mohamed v. Uber Technologies, Inc. overturned a District Court’s ruling which originally found Uber’s arbitration agreements to be unenforceable. Last year, the District Court held Uber's arbitration agreements were unconscionable due to the inclusion of a waiver of claims brought under California’s Private Attorneys General Act (“PAGA”). The decision invalidated nearly 250,000 arbitration agreements between Uber and independent drivers, allowing the case against Uber to proceed as a class action in civil court. Uber appealed the decision, arguing that the District Court should have simply severed the PAGA waiver pursuant to a severability provision, rather than invalidating the entire agreement. The Court of Appeals agreed with Uber, ruling that the PAGA waivers be severed from the arbitration agreements and the agreements are otherwise enforceable. The Ninth Circuit dismissed the trial judge's reasons for declaring parts of the arbitration agreement unenforceable as artificial. The appeals panel found the lower court judge also ignored Ninth Circuit precedent, erroneously applying a California Supreme Court decision that itself cited a relevant Ninth Circuit decision. This lastest decision will allow Uber drivers to pursue their PAGA claims in court, but will allow Uber to compel individual arbitration on all other claims. Uber had agreed to a $100 million settlement, which the trial court rejected last month, calling it unfair and inadequate. See more on here-- and full decision--