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Uber loses court case, workers in California win.

Uber​ Must‌ Face Lawsuit​ Over UberEats Drivers’ Expenses, California Supreme ​Court⁢ Rules

By Daniel⁢ Wiessner

(Reuters) ⁢– Uber​ Technologies​ Inc ‌must face ⁢a ‍California lawsuit claiming it ‌should have ‍covered‍ UberEats ⁣drivers’ ‌work-related​ expenses, the ‍state’s top ⁣court ⁢said ​on Monday, in‍ what ​could be a⁣ major blow to ⁢companies in⁤ the⁢ largest U.S. state⁢ and⁢ a ⁢win for⁢ labor ⁢advocates.

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The ​California Supreme​ Court⁣ in a unanimous ruling said UberEats driver⁣ Erik Adolph‌ did not give up his⁤ right under state‍ law‌ to‍ sue⁤ on⁤ behalf‍ of a ‍large ⁤group of workers even‍ though ​he signed​ an ​agreement to⁢ bring his‌ own ⁢work-related​ legal claims in ​private‌ arbitration. ​

Adolph​ sued⁣ Uber ⁤in 2019, ​claiming the ​company misclassified ​UberEats drivers ​as ‍independent contractors rather‌ than ⁤employees, ⁤who must be⁤ reimbursed for⁣ work⁤ expenses under California ⁢law.

A ‌unique ⁢California ‌law‌ called the Private Attorney ‌General Act, or PAGA, allows ​workers to sue ‍for‌ employment law ⁣violations on behalf ⁤of‍ the⁢ state⁣ and ‍keep ⁢one-quarter​ of ⁢any⁢ money⁢ they ‍win. The ‌rest goes‌ to the ⁣state ⁣to fund an ‌agency that⁣ enforces labor laws.

The California ⁢Supreme Court ⁤said ⁢nothing​ in‌ that​ law bars workers‍ from pursuing claims on⁤ their ⁢own ‍behalf ​in arbitration ⁢while separately litigating ‌large-scale ‌claims ‌in ​court.‍ ⁣ ⁣​ ​

The decision ‍likely undermines the significance ‌of a‌ 2022 ⁣U.S. Supreme Court ​ruling⁢ involving ⁤Viking River⁤ Cruises that‍ said⁤ companies could force ⁤individual PAGA​ claims into arbitration, and​ could mean that California employers ‌will face more​ large-scale ‍lawsuits.

Theane Evangelis, ‍a lawyer for Uber, ​said ​in‌ a⁣ statement ​that ‍Monday’s ruling conflicts⁢ with‌ the Viking River⁤ decision and violates a‍ federal​ law⁣ that requires enforcing valid arbitration agreements.

“We‌ are⁣ considering our⁢ appellate⁢ options,” ‍she said.

Michael​ Rubin, ‌who⁢ represents‍ Adolph, ‌said the ‌ruling could ⁢spur ⁢companies‌ to‍ reconsider​ forcing‌ workers’⁢ claims into ⁣arbitration if large-scale ​PAGA lawsuits⁤ can ⁢still proceed in court. Rubin also ⁤represented ⁤the⁤ plaintiff⁤ in the ‌Viking River ⁢case.

More⁤ than ‍half ‍of private ⁤sector, ⁣nonunion⁤ U.S. workers are required⁣ to⁢ sign ⁣arbitration⁤ agreements as ‍a condition of employment. The agreements typically⁣ bar them ⁢from‍ filing ⁣or ⁣participating in traditional ‍class action lawsuits.

Critics of mandatory⁣ arbitration say ⁣it‌ discourages workers from‍ bringing⁣ individual ⁢claims⁤ that involve​ small sums of money, and that‍ workers⁤ who‍ do ‍bring disputes in⁣ arbitration ⁤are more likely‌ to⁤ lose.

Business groups ⁣maintain‌ that arbitration is⁤ quicker and ⁣more efficient ⁣than court, allowing ⁣workers to recoup ‌more money.‌ Trade groups hailed last year’s ‍Viking ‌River ruling, ​saying it ⁣would prevent ‌plaintiffs in California⁣ from‌ using PAGA as​ a‌ way ⁢around⁤ arbitration.

Groups⁤ including the⁤ U.S. Chamber ‍of ‍Commerce, the country’s ‌largest ‍business ​lobby, ​filed⁤ briefs in Monday’s‌ case⁤ warning⁣ the ⁤California Supreme​ Court ⁢that​ a​ ruling ‌against‌ Uber ‍could encourage workers ‍to file⁤ meritless‍ lawsuits⁤ and⁣ pressure ‍companies‍ to settle them.

But⁣ the ⁢court⁣ said those concerns ⁣should be ⁤directed ⁣at state legislators, who⁤ have⁢ the power to ⁣change the ⁣law.

‍ (Reporting by Daniel ​Wiessner ‌in ​Albany,⁢ New York and Alison Frankel in New York; ‍Editing​ by Alexia Garamfalvi ⁢and ⁢Josie ‍Kao)

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