Uber Sued Again Over ‘Wage Theft’in New York

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By Kevin McGowan

Oct. 26 — A New York City taxi drivers’ union and individual drivers sued Uber Technologies Inc. for the second time in four months, claiming the ride-sharing company engages in “wage theft” by not paying drivers either the minimum wage or for overtime ( N.Y. Taxi Workers All. v. Uber Techs, Inc. , S.D.N.Y., No. 16-8299, complaint filed 10/24/16 ).

The parties’ original lawsuit, filed June 2 in federal district court in Manhattan, alleged Uber violates the Fair Labor Standards Act and the New York Labor Law.

In a tactical move, four of 10 drivers named in the original class action Oct. 24 filed a second complaint that makes the same substantive claims.

Those drivers, who haven’t opted out of arbitration agreements with Uber, will contend the National Labor Relations Act bars arbitration pacts containing class action waivers, said attorney Jeanne E. Mirer, who represents the union and drivers in both cases.

They will argue Uber can’t compel them to arbitrate the employment dispute, Mirer told Bloomberg BNA Oct. 26.

Meanwhile, the union and the six drivers in the original lawsuit who opted out of arbitration can more quickly move for court consideration of their “wage theft” claims, she said.

Uber representatives weren’t immediately available for comment Oct. 26.

Whether Uber drivers are employees or independent contractors is being litigated in multiple venues nationwide.

Courts have split on whether drivers’ claims against Uber regarding their employee status, wages or other working conditions must be arbitrated or may proceed as class actions.

In a separate case, a federal judge in New Jersey Oct. 24 dismissed some drivers’ Fair Credit Reporting Act claims against Uber and a background check firm after the parties settled the lawsuit for an undisclosed sum.

Class Action Waiver Issue

Federal appeals courts are split on whether class action waivers violate workers’ NLRA rights to engage in concerted activities.

The Seventh Circuit and the Ninth Circuit agreed with the National Labor Relations Board that arbitration pacts with such waivers violate workers’ rights under the NLRA. But other federal appeals courts, including the Second Circuit, rejected the NLRB’s position and upheld class action waivers in arbitration.

Multiple petitions for U.S. Supreme Court review are pending, and the justices could decide to hear the NLRA issue this term.

After the Uber drivers filed their original complaint in June, the Second Circuit said arbitration pacts with class action waivers are enforceable.

The Uber drivers therefore decided to split their lawsuit, Mirer said,

“We definitely want to take part in challenging” the legality of arbitration agreements with class action waivers, she said.

In their complaint, the Uber drivers said they lacked the “bargaining power” to resist the “one-sided” arbitration agreements the company presses them to sign.

Those agreements require “all claims generally applicable to workers” to be arbitrated while not requiring arbitration on claims that an employer typically would bring, the complaint said.

Pay Reduced to Unlawful Levels

The two lawsuits are the first class actions filed against Uber for “New York-specific wage theft,” the taxi workers’ union said in an Oct. 24 statement.

Uber deducts sales tax and a surcharge for an injured workers’ fund from drivers’ pay, after the company takes its own commission, the union said.

By contrast, other car service companies in New York add the sales tax and surcharge to the passenger’s fare, the union said.

Uber’s pay practices mean many drivers working more than eight hours a shift earn less than minimum wage and receive no overtime pay, the union said.

Uber breached its contracts with the drivers in addition to violating federal and state wage laws, the complaint alleged.

No attorney has yet entered an appearance for Uber in the latest case. Littler Mendelson P.C. represents Uber in the original case filed in June.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

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