Arbitration Agreement doesn't override right under State Law to file Class-Action Lawsuit, US Court rules against Uber

In a case of covering drivers' work-related expenses, Uber Technologies is expected to face a California lawsuit, according to the state's top court. If lost by Uber, the case can be a major blow to companies in the largest US state and a win for labour advocates.

In a unanimous ruling, the California Supreme Court said that UberEats driver Erik Adolph refused to give up his right under state law to sue right under state law to sue even though he signed an agreement to bring his own work-related legal claims in private arbitration.

Why is Uber facing a lawsuit in California?

UberEats driver Erik Adolph sued Uber in 2019. He claimed that the company misclassified UberEats drivers as independent contractors rather than employees, who must be reimbursed for work expenses under California law. The company is facing lawsuit under California's Private Attorney General Act (PAGA).

What is California's law PAGA?

The Private Attorney General Act, gives workers the power to sue its employer for employment law violations on behalf of the state. They are also allowed to keep one-quarter of any money they win. The remaining victory amount goes to the state to fund an agency that enforces labour laws.

According to the California Supreme Court, nothing in the law bars workers from pursuing claims on their own behalf in arbitration while separately litigating large-scale claims in court.

(Only the headline and picture of this report may have been reworked by the LatestLaws staff; the rest of the content is auto-generated from a syndicated feed.)

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