Category: litigation

Court proceedings of all types

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London Employment Tribunal determined that Uber drivers are employees

In response to a complaint from trade union GMB, the London Employment Tribunal determined that Uber drivers are employees.

Remarking “the lady doth protest too much, methinks” at Uber’s numerous contractual provisions insisting that drivers are not employees, the LET simultaneously looked at Uber’s various “unguarded moments” in which the company used terminology most consistent with employment status. Ultimately the LET said it is “unreal” to deny the “practical reality” that Uber provides transportation services, and in that context the LET found that the drivers must be employees.

The LET rejected as “ridiculous” the suggestion that Uber is “a mosaic of 30,000 small businesses linked by a common ‘platform.'” The LET rejected Uber’s claim of only providing driver with “leads.” For one, drivers have no opportunity to negotiate or bargain with passengers. The LET also examined the interaction between drivers and passengers, including when drivers learn the route and how payment occurs. The LET said all these factors indicate an employment relationship.

In a 13-item list, LET gathered factors indicating that drivers are employees, including those detailed above as well as Uber’s practice of interviewing and recruiting drivers, instructing drivers in various respects, setting routes, collecting ratings and imposing penalties, handling complaints, and having the power to amend the contract provisions of the relationship.

Informed by the finding that drivers are employees, the LET went on to analyze their rights as employees and Uber’s violations of those rights.

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Uber investors challenged board decision

In October 2017, Uber’s board voted to end the benefit that let early employees and investors get 10 votes per share, a benefit which had given those groups disproportionate control. In response, early Uber investors Shervin Pishevar and Steve Russell said they would sue to block the change. Their statement:

Today’s action by the board was the culmination of a blatant bait and switch, essentially robbing loyal employees, including the more than 200 early founding Uber employees and advisors, of their hard earned shareholder rights.

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Claimed to be an “information society service,” but regulator said actually a transportation service

Seeking to avoid regulations from individual countries in Europe, Uber argued that it is an “information society service” that could only be regulated in accordance with Europe-wide procedures. In a May 2017 decision, the European Court of Justice said that Uber “falls within the field of transport” and therefore “Uber can … be required to obtain the necessary licenses and authorizations under law.”

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Texas firemen retirement fund claims Uber misled them about risks and law-breaking

In a lawsuit, the Irving Firemen’s Relief & Retirement Fund alleges that Uber and its former CEo Travis Kalanick knowingly misled them while raising funds, including failing to disclose that the company had broken laws.

The lawsuit chronicles a variety of Uber improprieties including “Greyball” evasion of law enforcement, “Hell” tracking of rivals, allegations of intellectual property theft from Google, sexual harassment and other human resources violations, knowingly renting out recalled and unsafe vehicles, and theft of a passenger’s medical records.

The lawsuit seeks class-action treatment for Uber investors.

complaint

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Judge said Uber abused attorney-client privilege

San Francisco district Judge William Alsup criticized Uber’s practice of including lawyers in discussions strategically — using the lawyer’s presence to claim that discussions were privileged if Uber wants to keep the content confidential, but claiming that the attorney did not attend in the capacity of an attorney if that advances Uber’s interests. Alsup explains:

Uber has indulged in the slick practice of including its lawyers in meetings and communications and deciding after the fact if a lawyer was actually included for the purpose of providing legal advice, all in accordance with what happens to be convenient for Uber’s case. Where, as here, the contents of a meeting prove advantageous for Uber to reveal, it readily claims that the lawyer did not attend the meeting in their capacity as a lawyer. But where the contents of a meeting would hurt Uber’s litigation position, Uber is quick to conceal the facts under claims of privilege.

Alsup concluded that he will not “indulge this pattern of convenience.”

Full order from Judge William Alsup and full order from Magistrate Judge Jacqueline Scott Corley. Waymo v. Uber litigation docket.

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Judge said Uber lawyers “misled the court”

San Francisco district judge William Alsup said he would tell the jury that Uber lawyers “misled the court” and withheld documents. He explained that he was “inclined to tell the jury…that [Uber] was ordered to come clean, ordered to come clean again, and did not come clean — finally in June or July came clean.” Alsup continued: “You misled the judge time and time again.”

Waymo v. Uber litigation docket

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Uber investor challenged “fraud” by former CEO Travis Kalanick

In a Delaware complaint, Uber investor Benchmark Capital Partrners challenged “the fraud, breaches of fiduciary duty, and breaches of contractual obligations perpetrated by” former Uber CEO Travis Kalanick “to entrench himself on Uber’s Board of Directors and increase his power over Uber for his own selfish ends.” The lawsuit focused in part on Kalanick’s “fraudulently obtain[ing] control” of three new seats on Uber’s boards through “his material misstatements and fraudulent concealment … of material information” that would have led Benchmark to reject the request.

Benchmark said Kalanick engaged in “gross mismanagement and other misconduct” which it summarizes as follows:

Kalanick’s personal involvement in causing Uber to acquire a self-driving vehicle start-up that, according to a confidential report not disclosed to Benchmark at the time (the “Stroz Report”), allegedly harbored trade secrets stolen from a competitor; an Uber executive’s alleged theft of the medical records of a woman who was raped by her Uber driver in India; a pervasive culture of gender discrimination and sexual harassment that ultimately prompted an investigation by the former U.S. Attorney General Eric Holder; and a host of other inappropriate and unethical directives issued by Kalanick.

Benchmark said Kalanick “knowingly concealed these matters from” it and other investors.

Benchmark explained its approach and its concerns in a letter to Uber employees.

In a statement, Kalanick replied: “I am disappointed and baffled by Benchmark’s hostile actions, which clearly are not in the best interests of Uber and its employees on whose behalf they claim to be acting.”

Kalanick moved to send the lawsuit to arbitration, avoiding a deposition that Recore said could have been “damaging.” On August 30, 2017, the Court agreed, ending the public litigation docket and putting all further proceedings in confidential arbitration.

Litigation docket

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Prohibited pricing practices in India

In an August 2017 decision, a New Delhi magistrate held that Uber, as well as local competitor Ola, had violated the Motor Vehicles Act by charging prices other than those specified by law. See Section 67(d).

The decision resulted from a complaint filed by a non-government organization, Nyayabhoomi, which also alleged other violations: vehicles with tourist permits providing services on point-to-point basis in violation of law; running on diesel fuel in violation of orders from the Supreme Court of India.

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Inconsistent positions as to driver employment status

Uber largely argues that drivers are not employees, allowing Uber to avoid paying payroll tax, providing workers’ compensation insurance, reimbursing employment-related expenses, and more.

But when Uber was sued for sending unsolicited text messages recruiting drivers, without recipients’ consent, Uber defended the messages on the grounds that they were offers of employment, which under federal law can be sent without a recipient’s consent.

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Reduced tax obligations by classifying drivers as contractors, not employees

Uber classified drivers as contractors, not employees.  As a result, the company avoided withholding income tax from driver earnings, and avoided paying the employer’s share of payroll taxes.

The correctness of this classification is disputed via ongoing litigation in numerous jurisdictions. On July 12, 2017, Uber drivers in North Carolina won preliminary class-action status in a case brought under the Fair Labor Standards Act.

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