12,000 Uber drivers say the company is refusing to honor the arbitration clause in its terms and conditions
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- A lawsuit in California claims Uber is purposefully delaying the arbitration requests of more than 12,000 drivers.
- The drivers - considered contractors by Uber - are requesting arbitration for complaints regarding minimum wage, overtime pay, and more.
- At the current rate Uber is processing the complaints, it would take 10 years for all of the complaints to be heard, the suit says.
Like thousands of other companies, Uber requires most drivers to sign an arbitration agreement that requires disputes to be resolved directly with the company, and not through a court.
There is an option to opt-out of the clause, as outlined in the company's 21-page terms and conditions, but it must be done in writing within 30 days of signing the agreement.
Now, fed up with falling pay and their status as contractors rather than employees, 12,501 drivers have filed a lawsuit in California accusing Uber of ignoring their requests for arbitration. The suit was first reported by Motherboard.
Of the 300 pages of partners requesting arbitration, the plaintiffs claim only 47 have been appointed arbiters and only six have seen the process move forward.
"They're not using what they used as a shield as a sword," Stephen Larson, an attorney for the petitioners, told Business Insider. "We're essentially calling their bluff. This has been the trend for corporations for decades across the country, of inserting this clause specifically to block class action lawsuits."
An Uber spokesperson declined to comment.
The case was originally brought as a class action lawsuit in multiple states regarding drivers status as contractors. Their complaints in five states range from failure to pay minimum wage, lack of overtime compensation, no paid sick leave, and other things that would be required if drivers were considered employees.
"The essential issue is whether they're employees or contractors," said Larson, representing the drivers. "They're all making the same complaint."
In order for a request for arbitration to proceed, Uber is responsible for paying a fee to JAMS - one of the largest alternative dispute resolution (ADR) providers in the country.
"It has been more than three-and-a-half months since the first Petitioners served their individual arbitration demands," the suit reads. "Yet Uber has refused to pay the necessary fees to commence and administer arbitration in all but a handful of cases."
At this rate, the plaintiffs estimate in filings that "it would take approximately 10 years before the last Petitioners' arbitration even commenced."
Uber has previously touted the benefits of arbitration. "The entire purpose of arbitration is to provide an inexpensive and expeditious means of resolving disputes," the company argued in a separate case in 2015, citing a court decision from 1985.
Even if drivers were considered employees, they could still be subject to strict arbitration rules. Some 60 million American employees are now barred from using the courts for an array of claims against their employers, including race discrimination, short pay, workplace safety, and class-action litigation, according to research by the Economic Policy Institute.
The number of US employees covered by mandatory arbitration agreements now exceeds 55%, up from 2% in 1992, and 80% of Fortune 100 companies have used arbitration since 2010, including Amazon, Nike, and Exxon Mobil.
On Friday, the case was moved to The US District Court in San Francisco from San Jose. Uber has 21 days from its receipt of the original summons to respond.
Michael Selby-Green contributed to this report.
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