Capriole v. Uber Techs., Inc.

• Decision Date: 13 May 2020
• Docket Number: Case No. 20-cv-02211-EMC
• Court: U.S. District Court — Northern District of California
• Parties: John CAPRIOLE, et al., Plaintiffs, v. UBER TECHNOLOGIES, INC., et al., Defendants.

460 F.Supp.3d 919

John CAPRIOLE, et al., Plaintiffs,

v.UBER TECHNOLOGIES, INC., et al., Defendants.

Case No. 20-cv-02211-EMC

United States District Court, N.D. California.

Signed May 13, 2020

Filed May 14, 2020

Karla E. Zarbo, Office of the Attorney General, Shannon E. Liss-Riordan, Adelaide H. Pagano, Anastasia Doherty, Anne R. Kramer, Shannon Liss-Riordan, Lichten & Liss-Riordan, P.C., Boston, MA, for Plaintiff John Capriole.

Shannon Liss-Riordan, Lichten & Liss-Riordan, P.C., Boston, MA, for Plaintiffs Martin El Koussa, Vladimir Leonidas.

Blaine H. Evanson, Brandon Stoker, Pro Hac Vice, Heather Richardson, Pro Hac Vice, Theane Evangelis, Pro Hac Vice, Gibson Dunn and Crutcher LLP, Los Angeles, CA, Joshua S. Lipshutz, Gibson, Dunn & Crutcher, Washington, DC, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO COMPEL ARBITRATION AND DENYING PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

Docket Nos. 42, 67

EDWARD M. CHEN, United States District Judge

I. INTRODUCTION

John Capriole ("Mr. Capriole"), Martin El Koussa ("Mr. El Koussa"), and Vladimir Leonidas ("Mr. Leonidas") (collectively "Plaintiffs") bring this class action to compel Uber Technologies, Inc. ("Uber") to comply with Massachusetts labor laws and to classify Uber drivers as employees. Uber and Dara Khosrowshahi ("Mr. Khosrowshahi"), the President and CEO of Uber, are named as Defendants. Plaintiffs assert that, as a result of Uber's alleged misclassification of drivers, they have been forced to bear the expenses of their employment, been denied Massachusetts minimum wage for hours worked, been deprived of overtime pay, and—as is particularly relevant to their current motion—been denied paid sick leave. This case was originally filed in federal court in Massachusetts but was transferred to the Northern District of California pursuant to a forum selection clause in Uber's driver agreement. In September 2019, Plaintiffs filed a motion for a preliminary injunction in Massachusetts, but that motion was denied and is currently on appeal before the First Circuit. Plaintiffs subsequently filed a new Emergency Motion for Preliminary Injunction, which is now pending before this Court. Defendants in turn have filed a Motion to Compel Arbitration.

II. BACKGROUND

A. Factual Background

Mr. Capriole is a resident of Haverhill, Massachusetts. See Second Amended Complaint ("SAC") ¶ 7, Docket No. 77. He has worked there as an Uber driver since April 2016. Id. ¶¶ 7, 35. Mr. El Koussa is a resident of Boston Massachusetts. Id. ¶ 8. He has worked there as an Uber driver since July 2014. Id. Mr. Leonidas is a resident of Braintree, Massachusetts. Id. ¶ 9. He has worked there as an Uber driver since May 2016. Id. Uber is a corporation with its headquarters in San Francisco. Id. ¶¶ 11, 15. Mr. Khosrowshahi is the President and Chief Executive Officer of Uber; Plaintiffs assert that he is "responsible for Uber's pay practices and employment policies." Id. ¶ 12. (Together, Uber and Mr. Khosrowshahi are referred to as "Defendants.")

Plaintiffs bring this class action on behalf of all "individuals who have worked as Uber drivers in Massachusetts who have not released all of their claims against Uber." SAC ¶ 10. As noted above, they contend that "Uber has misclassified its drivers, including Plaintiffs John Capriole, Martin El Koussa, and Vladimir Leonidas as independent contractors when they should be classified under Massachusetts law ... as employees." Id. ¶ 2. Because Uber drivers are not classified as employees, they are required "to pay business expenses (including but not limited to the cost of maintaining their vehicles, gas, insurance, phone and data expense, and other costs)," they are not guaranteed minimum wage or overtime premiums, and they do not receive paid sick leave, as would otherwise be required under Massachusetts law. Id. ¶ 2. Massachusetts requires employers to provide "a minimum of one hour of earned sick time for every thirty hours worked by an employee ... but employees shall not be entitled to use accrued earned sick time until the 90th calendar day following commencement of their employment." MASS. GEN. LAWS. ch. 149, § 148C ; see also SAC ¶ 2. Employees may earn and use up to forty hours of paid sick time per calendar year. MASS. GEN. LAWS. ch. 149, § 148C.

Plaintiffs contend that because drivers are not classified as employees, many of them "struggle to support themselves" and, as a result, "feel the need to continue working ... even if they feel ill." FAC ¶¶ 3, 4. While such a dilemma might be problematic in normal times, in light of the "worldwide crisis" generated by COVID-19, Uber's employee-classification and sick-leave policies are exacerbating a life-threatening global emergency. Id. ¶ 4. Without the option of paid sick leave, Uber drivers who cannot afford to make a different choice "will continue working and risking exposing hundreds of riders who enter their car[s] on a weekly basis to this deadly disease." Id. ¶ 5. Such actions wholly contravene the advice of public health officials, who have "advised that anyone who feels ill should stay home and not go to work." Id. ¶ 4. Thus, Plaintiffs contend that Uber's policies "creat[e] an immediate danger, not only to Uber drivers, but to the general public as well." Id. ¶ 5.

B. Arbitration Agreement

In moving to compel arbitration, Uber cites two arbitration agreements, which are contained in Uber's 2015 Technology Services Agreement ("2015 Agreement") and the 2020 Platform Services Agreement ("2020 Agreement"). See Reply in Support of Motion to Compel Arbitration at 1, Docket No. 83. It appears that Mr. El Koussa and Mr. Leonidas "agreed to individual arbitration in the 2020 Platform Access Agreement ... and did not opt out."¹ Id. Mr. Capriole, however, agreed to both the 2015 and the 2020 Agreement, but opted out of the 2020 Agreement. See Motion to Compel Arbitration ("MTC") at 4, Docket No. 67 (citing Exh. 7 to Declaration of Brad Rosenthal ("Rosenthal Decl."), Docket No. 69-7). Uber contends that, because Mr. Capriole did not originally opt out of the 2015 Agreement, he remains bound to arbitrate his claims because of a provision of the 2020 Agreement which informs any drivers opting out of that agreement that they remain bound by any existing arbitration agreement to which they are a party with Uber. See MTC at 5. Uber's contention is discussed in greater detail below. See Section III.B.1.

In Uber's 2015 Technology Services Agreement, Section 15.3 sets forth the terms of the company's Arbitration Provision:

IMPORTANT: This Arbitration Provision will require you to resolve any claim that you may have against the Company or Uber on an individual basis, except as provided below, pursuant to the terms of the Agreement unless you choose to opt out of the Arbitration Provision. Except as provided below, this provision will preclude you from bringing any class, collective, or representative action (other than actions under the Private Attorneys General Act of 2004 ("PAGA")), California Labor Code § 2698 et seq. ("PAGA") against the Company or Uber, and also precludes you from participating in or recovering relief under any current or future class, collective, or representative (non-PAGA) action brought against the Company or Uber by someone else.

This Arbitration Provision is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the "FAA") and evidences a transaction involving interstate commerce. This Arbitration Provision applies to any dispute arising out of or related to this Agreement or termination of the Agreement and survives after the Agreement terminates.

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Except as it otherwise provides, this Arbitration Provision is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law or before any forum other than arbitration, with the exception of proceedings that must be exhausted under applicable law before pursuing a claim in a court of law or in any forum other than arbitration. Except as it otherwise provides, this Arbitration Provision requires all such disputes to be resolved only by an arbitrator through final and binding arbitration on an individual basis only and not by way of court or jury trial, or by way of class, collective, or representative action.

Except as provided in Section 15.3(v), below, regarding the Class Action Waiver, such disputes include without limitation disputes arising out of or relating to interpretation or application of this Arbitration Provision, including the enforceability, revocability or validity of the Arbitration Provision or any portion of the Arbitration Provision. All such matters shall be decided by an Arbitrator and not by a court or judge. However, as set forth below, the preceding sentences shall not apply to disputes relating to the interpretation or application of the Class Action Waiver or PAGA Waiver below, including their enforceability, revocability or validity.

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You and the Company agree to resolve any dispute that is in arbitration on an individual basis only, and not on a class, collective action, or representative basis ("Class Action Waiver"). The Arbitrator shall have no authority to consider or resolve any claim or issue any relief on any basis other than an individual basis. The Arbitrator shall have no authority to consider or resolve any claim or issue any relief on a class, collective, or representative basis. Notwithstanding any other provision of this Agreement, the Arbitration Provision or the JAMS Streamlined Arbitration Rules & Procedures, disputes regarding the enforceability, revocability or validity of the Class Action Waiver may be resolved only by a civil court of competent jurisdiction and not by an arbitrator. In any case in which (1) the dispute is filed as a class, collective, or representative action and (2) there is a final judicial determination that all or part of the Class Action Waiver [is] unenforceable, the class, collective, and/or representative action to that

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