Uber Technologies Inc.’s arbitration agreements are mostly valid and enforceable, says the Ninth Circuit Court of Appeals, giving the ride-hailing company a leg up in other legal battles, including whether drivers are independent contractors or true employees. Mohamed v. Uber Techs. Inc. (9th Cir. 2016).
The ruling, which covers some 385,000 drivers—current and former—in California and Massachusetts, addresses background checks of drivers. While the ruling is limited to that issue, Uber hopes the precedential nature of the ruling will make it more difficult for individual drivers to band together in other potential class-action lawsuits, instead requiring them to air their grievances in arbitration, where Uber can fight drivers individually.
An appeals panel composed of three judges overturned U.S. District Judge Edward Chen, who had ruled the arbitration agreements were unenforceable.
Uber is currently the world’s largest ride-hailing company, with a valuation of $69 billion.