Uber drivers cannot be compelled to arbitrate OT claims - 3rd Circuit - Law.com

The Federal Arbitration Act demands that agreements to arbitrate be enforced but " a provision in § 1 sets an outer limit, providing that “nothing” in the FAA “shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce,” [The District] Court ruled that Singh did not fall within the ambit of the residual clause of § 1 because that clause only extends to transportation workers who transport goods, not those who transport passengers. We disagree with this reading. Consistent with our longstanding precedent, we hold that the residual clause of § 1 may extend to a class of transportation workers who transport passengers, so long as they are engaged in interstate commerce or in work so closely related thereto as to be in practical effect part of it." Joseph Greenaway, Judge, U.S. Ct. of Appeals, 3rd Circuit
Uber drivers cannot be compelled to arbitrate OT claims - 3rd Circuit - Law.com

In Jaswinder Singh v. Uber Technologies 939 F.3d 210 a federal appeals court has ruled that Uber cannot enforce an arbitration clause in a class action lawsuit claiming the company’s New Jersey drivers are misclassified as independent contractors.

The U.S. Court of Appeals for the Third Circuit ruled Wednesday that Uber drivers fall under an exemption to the Federal Arbitration Act for transportation workers engaged in foreign or interstate commerce. The appeals court reversed a U.S. District Court judge who granted Uber’s motion to dismiss the case and compel arbitration.

At issue in the case is Section 1 of the Federal Arbitration Act, which provides that nothing in the FAA shall apply to contracts of employment of seamen, railroad employees or any other class of workers engaged in foreign or interstate commerce.

Lawyers for named plaintiff Jaswinder Singh claimed that, to the extent that he had an agreement with Uber, it fell under the residual clause of Section 1 of the FAA—the “any other class of workers” portion. U.S. District Judge Freda Wolfson ruled that Singh did not fall under the residual clause because that clause only applies to workers who transport goods, not those who transport passengers. But the court of appeals disagreed, holding that the residual clause of Section 1 may extend to a class of transportation workers who transport passengers, as long as they are engaged in interstate commerce or in work closely related to interstate commerce as to be in practical effect part of it.

But because the record is unclear on whether the plaintiff and class are engaged in interstate commerce, the appeals court remanded the case to the District Court for further proceedings.

Singh and the class were represented by Justin Swidler, Matthew Miller and Daniel Horowitz of Swartz Swidler in Cherry Hill, New Jersey.

Uber was represented by Theane Evangelis, Theodore Boutrous Jr., Samuel Eckman and Joshua Lipshutz of Gibson Dunn as well as Paul Lantis and William Simmons of Littler Mendelson. Uber and it’s legal team did not respond to a request for comment.

The New Jersey lawsuit seeks the right of Uber drivers to be paid overtime for working in excess of 40 hours a week, and states that drivers’ expenditures for tolls, gas and mobile phone expenses are an unlawful constructive deduction under New Jersey law. The suit claims Uber drivers are entitled to overtime because they do not have the authority to hire and fire other employees and did not perform work related to management operations that involved the exercise of discretion over matters of importance.