Gig News: In First Uber Classification Arbitration, Driver Ruled Independent Contractor

The Recorder reports that Uber has “successfully persuaded a private arbitrator that a California driver for the transportation company is an independent contractor, not an employee, in the first arbitration in the United States to test that issue.”  While drivers continue to challenge Uber’s mandatory arbitration agreements in court, the arbitrator’s decision represents the outcome of the first of what could become many individual challenges by drivers asserting proper classification as employees, if arbitration agreements are enforced.

Arbitrator Michael Marcus applied the Borello test, which is used to determine proper classification under California law and gives considerable weight to the control exercised by the alleged employer over the worker.  After considering the Borello factors in light of the facts and circumstances of the particular driver’s relationship with Uber, Marcus concluded that Uber lacks the requisite control over the particular driver, or any comparable driver, to be considered an employer.  He particularly noted that Uber does not guarantee rides, require minimum activity time, prevent drivers from driving for competitors, or direct driver routes.  Marcus’ conclusion contrasts with that of Professor Sachs and others.

Shannon Liss-Riordan, who continues to litigate the most prominent driver classification cases against Uber and has yet to file a case for arbitration due to pending litigation, told The Recorder that individual arbitrations are insignificant and lack precedential value:

In arbitration, you may win some and lose some, depending on what arbitrator you get in front of,” Liss-Riordan said in an email. “This is just a very inefficient system for adjudicating a widespread issue.

While the driver in question will not be classified as an employee and receive the corresponding benefits or protections, Liss-Riordan indicates the robust efforts of driver advocates will continue unabated.