California judge reverse his own decision after reconsideration

As some of our readers may already know, the ridesharing service Uber uses a smartphone application to connect people in need of transportation with drivers who are willing to provide it. The service is now available in a number of cities across the nation and has gained thousands of followers.

But the company has also gained attention from the legal community as well. Since its launch in 2012, it has sparked protests the world over in which some have argued that Uber unfairly competes with traditional tax services and compromised the safety of both its drivers and passengers.

Just recently though, Uber faced accusations that it violated the California labor code by falsely stating the gratuity included in the fare and failing to gives the appropriate amount of tips to drivers. This led to a class action lawsuit that went before a California District Court last year.

As some of you know, the case ultimately ended up in the hands of U.S. District Judge Edward Chen. In his 2013 decision, Chen held that the allegation of a labor violation could apply to out-of-state Uber drivers. But if you’ve been following the case since then though you know that Chen recently reversed his decision after a “fundamental mis-reading” of a 9th Circuit case he thought explained the use of choice-of-law clauses in contractual relationships.

The court’s reversal now excludes drivers in other states, making the class action lawsuit against Uber only open to drivers here in California. Although Chen is not allowing the class’ tortuous interference and breach of implied-in-fact contract claims to continue, violations of our state’s labor code and Unfair Competition Law are allowed to continue.

It’s unknown at this time when the Uber case will go back before the court though.

Source: Courthouse News Service, “Uber Driver Class Action Curbed Upon Reflection,” Maria Dinzeo, Sept. 5, 2014