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Uber Is Pulling Out All the Stops for Its California Labor Lawsuit

In a case where Uber is being charged with exploiting workers, Uber’s comeback is that it's actually empowering workers.​
August 7, 2015, 7:10pm
Image: AP

An employment lawsuit against Uber passed a milestone yesterday, with a hearing on whether to certify the class, which would allow the suit to proceed as a class action. From a legal standpoint, nothing has happened yet—no immediate ruling came down, so parties may be waiting weeks for a written opinion. But the three-hour hearing was an occasion to mark anyways, in no small part due to the spectacle that Uber put on both inside and outside of the courtroom. And in between showy remarks by Uber's attorney, Theodore Boutrous, was the lurking implication that this case could go up on appeal and challenge how all class actions operate.

This class action would potentially encompass 160,000 Uber drivers in California. The company's primary argument against certifying the class boils down to how it wouldn't be fair to the drivers who actually like Uber. Even as lawyers gathered inside the courtroom in anticipation of the certification hearing, Uber held a press conference outside the courthouse, with Uber drivers reading out statements about how they want to be independent contractors. During the hearing itself, Uber's lawyers cycled through a slide deck with pictures and quotes from drivers who say they don't want to be classified as employees.

Worker classification is the central point of the lawsuit—did Uber misclassify its drivers as independent contractors, rather than employees? If so, Uber could—among many other things—be on the hook for providing benefits and paying drivers' business expenses, like vehicles, gasoline, and maintenance.

O'Connor v. Uber has the potential to be a new genre of lawsuit, one that is for now driven mostly by plaintiff's attorney Shannon Liss-Riordan and her Boston-based labor and employment boutique firm, Lichten & Liss-Riordan. Liss-Riordan on her own is responsible for four class actions against so-called sharing economy companies: Uber, Lyft, Postmates, Homejoy. The very last is now shutting down, blaming litigation such as Liss-Riordan's.

In a case where Uber is being charged with exploiting workers, Uber's comeback is that it's actually empowering workers.

These developments must be troubling to many similar companies. If this is the dawn of a new kind of class action, now is the time to kill it before the trend catches on. Uber is no Homejoy, and has brought out the big guns. The company switched lawyers in April, dropping the large global law firm Morgan Lewis for another large global law firm, Gibson Dunn. The change most likely has to do with who comes with the Gibson Dunn package—Theodore Boutrous, "a hired gun of the highest caliber," who is arguably personally responsible for changing the landscape of class action law.

In 2011, Boutrous argued before the Supreme Court in Wal-Mart v. Dukes, successfully blocking the certification of a class of 1.5 million female workers at Wal-Mart, on the grounds that the workers did not have enough in common. The Supreme Court ruling made it harder to certify large classes in general, "handing defendants the ammunition they need to effectively slay mega–classes," thus subsequently casting a chill over many forms of class action practice.

Of course, O'Connor v. Uber is not at the same dizzying scale as Wal-Mart. The class is only a tenth of the size of Wal-Mart's, and rather than being a national case, it's limited to California drivers only. But the Wal-Mart decision still hangs over it, especially now that Boutrous is Uber's attorney.

Unsurprisingly, Uber is now doing its best to look like Wal-Mart. The company is hammering away at the lack of commonality between California drivers. "We have UberX, we have Uber Black, we have great variability," Boutrous said during the hearing. Indeed, Uber is very insistent on the detail that there are "17 different contracts" that govern the entire class. (One reason for the high number: the Uber, UberX, and Uber Black contracts are being counted as different contracts, and those basic three have changed and varied over the years).

Theodore Boutrous speaking to the press during the Wal-Mart trial of 2005. Image: AP/Eric Risberg

But the argument that Uber seems to love best is some version of "not all drivers." The company has trotted out 400 drivers who have declared on paper that they want to be treated as independent contractors, not employees. Even with some drivers now saying they were misled on what it meant to be a contractor, it's still an impressive move. But Judge Edward Chen expressed skepticism in court. "Four hundred sounds impressive, but when you compare that with 160,000 class members, that's 0.25 percent. Not even 1 percent." He added later, "I presume they weren't selected randomly on a scientific basis."

It would have been nice for Uber if the 400 declarations had been convincing to Judge Chen, but in any case they weren't entirely for his benefit. The driver declarations are part shock-and-awe tactic, part public relations. Uber is fighting this not just to avoid payroll taxes and mechanics bills, it's a battle to preserve its image as a liberating tool rather than an exploitative oppressor. In fact, while the lawyers were waiting inside for the certification hearing, Uber was holding a press conference outside the courthouse, with Uber drivers reading out statements about how they want to be independent contractors.

This exercise, legally speaking, is fairly pointless. "The relevant legal question at issue in this litigation is not whether drivers want to be employees, but rather whether they were properly classified under the relevant legal standard," plaintiffs wrote in one of their briefs. "Drivers' desires on this question are legally irrelevant."

In court, Judge Chen seemed to agree. "You cannot allow naysayers in a group of potential class members to control the situation," he said.

The argument that Uber seems to love best is some version of "not all drivers."

But Uber's seemingly obsessive focus on individual drivers' wants and wishes is less bizarre when understood as a political and philosophical declaration about what it is as a company. Uber gives drivers freedom, it wants to say. Uber gives its drivers the flexibility to choose their hours and take control of their destinies. Uber treats its drivers as though they are individuals. A class action over whether they've been mistreated would ultimately dehumanize them by taking away their agency.

In a case where Uber is being charged with exploiting workers, Uber's comeback is that it's actually empowering workers. The 400 declarations are a way to make Liss-Riordan's side look like they're the ones who don't respect drivers. "I believe the vast majority of drivers would disagree with Ms. Liss-Riordan's claim that the drivers are all low skill," Boutrous said at one point in the hearing, as they were arguing over how to apply the legal test for whether the drivers are employees.

It's a curious quirk of class actions that individual preferences are ignored. How strange is it, after all, that four individual drivers can drag the other 159,996 into a lawsuit with them? But that's how the law is—for now. Boutrous, who has already set an important Supreme Court precedent for class action law, might now be gunning for another. This time, it will be the imposition of Uber's basic philosophy on the rest of class action law—the notion that legal intervention, whether in the form of regulation or litigation, will violate the choice and dignity of individual drivers.

Boutrous seemed to imply that if the class is certified, Uber will appeal and appeal again if necessary. So why go through the bother, and why not just proceed with a regular lawsuit, he asked rhetorically.

"As much as I appreciate the view from 40,000 feet, there's no precedent for denying class certification because of developing law," Judge Chen replied. Later in the hearing, he seemed resigned to a future of endless appeals. "The chances are a higher court will have a look at whatever I do."