California won a minor ruling against Uber Technologies Inc. that stands to open up a bigger front in the fight by drivers for better benefits — especially for those who make airport runs and cross state lines.
A state judge suggested that such drivers may not be subject to the company’s arbitration requirement for employment disputes because they are involved in interstate commerce. He blocked Uber, for now, from proceeding with closed-door arbitration against a driver who filed a complaint with the California’s labor commissioner’s office over unpaid wages, overtime and expenses.
Uber has relied on arbitration and settlements to defeat lawsuits by drivers seeking the benefits of employees. It has also settled arbitration claims en masse.
Experts said the ruling, although incremental, carries added weight because California Labor Secretary Julie Su wants driver Sangam Patel’s claims argued in a proceeding before her agency.
Charlotte Garden, a professor at Seattle University School of Law, said the case is important because, unlike private lawyers, Su won’t settle with Uber.
“Su’s efforts to challenge Uber’s arbitration agreement reflect a trend of regulators,” who are “increasingly skeptical of the companies’ arguments that they should be allowed to police themselves,” Garden said.
Patel frequently took passengers to and from San Francisco International Airport. His case also concerns drivers who frequently cross state lines, including those transporting Lake Tahoe passengers between the casinos, hotels and ski areas dotting the imperceptible border between California and Nevada. At a hearing Thursday, San Francisco County Superior Court Judge Richard Ulmer described the boundary as a “line in the street.”
Uber’s lawyer, Sophia Behnia, argued that airport trips don’t amount to interstate commerce. She said the work of Uber drivers is “inherently local,” and drew a skeptical response from Ulmer when she told the judge that California drivers, under their contract, are allowed to take passengers only into Nevada — and forbidden to do the opposite.
“And it’s illegal for Daly City taxicabs to come into San Francisco — they do it every day,” the judge said, referring to trips between the adjacent cities.
Noting similar cases in Philadelphia and Minnesota, Ulmer said it was useful for fact-gathering and information-sharing to move forward in the case because California’s labor secretary requested it.
“Uber cases of all stripes seem to proliferate,” the judge said, adding that it would be useful to get his ruling on whether drivers who go to the airport and across state lines are exempt from arbitration.
“Why not get it over with?” Ulmer asked.
In cases such as Patel’s, Uber has argued the exemption from arbitration applies only to workers who transport goods, and not those who transport people, an argument Garden describes as “exceedingly weak.”
“It makes some sense that a public official charged with protecting workers’ rights has access to the information she needs to do that job effectively,” Garden said of Ulmer’s ruling.