Uber Technologies Inc. won a ruling that may put off the outcome of a bid by California drivers to be treated as employees in a lawsuit that has grown dramatically in both size and potential liability.
U.S. District Judge Edward Chen in San Francisco on Tuesday said he won’t issue a final judgment affecting most drivers in the class action following a June trial if an earlier decision to add more than 100,000 of them to the suit hasn’t been resolved on appeal. On Wednesday, Chen rejected a request by the driver’s lawyer to consider deciding the case without a trial.
In his Dec. 9 ruling, the judge allowed all drivers covered by the case to seek expense reimbursement, including as much as 57 1/2 cents for every mile driven. Chen had previously allowed the drivers to seek tips in the case.
A victory for the drivers seeking the pay and benefits of employees rather than independent contractors threatens to upend the ride share company’s business model and cut into its more than $60 billion valuation. Experts have said the stakes in the lawsuit grew by hundreds of millions of dollars as a result of the Dec. 9 ruling.
Chen concluded then that the company’s contract with its drivers improperly required them to resolve disputes through arbitration, preventing them from suing. Uber then sought to put the case on hold when it asked an appeals court to review the contract’s arbitration provision.
In Tuesday’s order, Chen said there’s a public interest in not delaying trial in the lead case in the nation on the status of Uber drivers. He also said “a serious legal question has been raised by Uber” that justifies waiting for the company’s appeal on the arbitration issue to play out before the final outcome of the case is decided. The order wouldn’t delay a final judgment after trial with regard to the earlier, smaller groups of drivers.
Jessica Santillo, a spokeswoman for Uber, said the company will ask the U.S. Court of Appeals in San Francisco to halt all proceedings in the case until the judge’s Dec. 9 order is reviewed on appeal.
Shannon Liss-Riordan, the lawyer for the drivers, said she’s pleased the June 20 trial date remains intact.
“Uber had attempted to avoid this trial altogether while its appeal proceeds,” she said in an e-mail. “Judge Chen agreed with our argument that the trial must go forward in any event, with or without Uber’s appeal and so there is no reason for the trial be delayed. ”
The case is O’Connor v. Uber Technologies Inc., 13- cv-03826, U.S. District Court, Northern District of California (San Francisco).