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A California court rules against Uber Technologies.
AFP via Getty Images
A court decision against a carpooling company
UberTechnologies
could prove to be a big problem for the workers.
California Supreme Court rules UberEats driver Erik Adolph can still sue the company on behalf of a group of workers, even though he signed an agreement to submit labor-related claims to arbitration private. Adolph sued UberEats in 2019, claiming the drivers were wrongly classified as contractors rather than employees, and the company still had to reimburse labor costs.
The court’s decision is significant not only because it could give drivers more rights to claim expenses, but also because it could open up food delivery and ride-sharing businesses to new rounds of large-scale class action lawsuits. ladder.
The ruling contravenes an earlier U.S. Supreme Court ruling and violates federal arbitration law, Uber’s attorneys said. “We are reviewing our appeal options,” company attorney Theane Evangelis said in a statement emailed to Barrons.
Lyft and
DoorDash
did not respond to requests for comment.
The decision did not affect shares of Uber (UBER), which rose 4.4% on Tuesday. Lyft (Lyft) rose 1.4%, while DoorDash (DASH) fell slightly.
Write to Brian Swint at brian.swint@barrons.com