Uber Technologies Inc. drivers are bound by mandatory arbitration agreements in employment disputes because they don’t fall under a federal exemption for transportation workers engaged in foreign or interstate commerce, a federal appeals court found.
The US Court of Appeals for the Third Circuit ruled Wednesday that a pair of proposed classes of drivers for the ride-hailing giant can’t invoke the Federal Arbitration Act’s carveout to avoid arbitrating their complaints against Uber. The drivers accused the company of misclassifying them as independent contractors rather than employees entitled to full benefits under federal and state wage and hour laws.
The drivers argued they participated in interstate commerce because they bring passengers to and from an airport. But a three-judge panel disagreed.
“The work of Uber drivers is centered on local transportation. Most Uber drivers have never made a single interstate trip. When Uber drivers do cross state lines, they do so only incidentally, as part of Uber’s fundamentally local transportation business,” said Judge Anthony J. Scirica, who wrote the opinion joined by Judges Kent A. Jordan and Marjorie O. Rendell. As a result, the drivers aren’t engaged in foreign or interstate commerce, ruling said.
The panel’s decision upheld a lower court’s November 2021 ruling sending the drivers’ lawsuits to arbitration. The...
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