A California appeals panel has ruled a Uber driver has to arbitrate labor code violations he alleges the gig company committed against him, but can still press a class action on behalf of other drivers for the same alleged breaches.
The decision, which was issued March 24, was penned by Associate Justice Brian Currey, with concurrence from Judge Natalie Stone and Associate Justice Audrey Collins, of California Second District Appellate Court. The decision centered on a suit brought by Johnathon Gregg against Uber, which is headquartered in San Francisco.
Gregg started working for Uber in 2016 as a driver. In 2018, he filed a putative class action alleging Uber broke state labor code by designating him and others as independent contractors. Uber countered that Gregg was bound by his work agreement with Uber, in which he agreed to arbitrate any disputes arising from his relationship with the company that otherwise would end up in court.
Gregg’s suit revolved around California’s Private Attorneys General Act (PAGA), which authorizes “aggrieved employees” to bring suits for civil penalties for themselves, other employees and the state, against their employers for labor code violations.
Gregg won in superior court, which led Uber to appeal.
Justice Currey noted the appeal was considered in light of the June 2022 U.S. Supreme Court ruling in Viking River Cruises v. Moriana. In that decision, the High Court laid down that an employer may enforce an agreement to arbitrate an individual's claim, but not claims an individual brings for others, as in a class action.
"Gregg must completely forgo his statutory right to seek civil penalties for Labor Code violations committed against other employees, whether in court or in arbitration," Currey said.
Currey added: "At this stage of the proceedings, Gregg has established standing to recover civil penalties for Labor Code violations committed against other employees. His agreement to arbitrate his individual claim does not nullify [his] allegations. It merely requires him to litigate a portion of his PAGA claim in an alternative forum governed by different procedures.”
Currey noted Gregg met the requirement needed to succeed with a PAGA complaint on behalf of other employees, which was that he suffered the same alleged labor code violations as did the others.
“An alleged ‘aggrieved employee’ is not stripped of standing to assert non-individual PAGA claims in court simply because he or she has been compelled to arbitrate his or her individual PAGA claim,” Currey said.
Having determined Gregg may still pursue a class action, Currey nonetheless ordered that the action cannot be pressed until Gregg’s arbitration case is completed.
Gregg has been represented by Jahan Sagafi, Adam Koshkin and Rachel Dempsey, of the New York City-based Outten & Golden; Thomas Girardi, of Girardi & Keese, of Los Angeles; and Stephen Schultz and Mark Bennett, of Palm Springs-based Slovak, Baron, Empey, Murphy & Pinckney.
Uber has been defended by Andrew Spurchise and Sophia Collins, of Littler Mendelson, of San Francisco, as well as by Theane Evangelis, Blaine Evanson and Bradley Hamburger, of Los Angeles-based Gibson, Dunn & Crutcher.