Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES— M.D. Fla.: Arbitration clause puts brakes on drivers’ suit against Uber, (May 9, 2016)

By Michael Menzhuber, J.D., LL.M.

A motion by Uber Technologies to compel arbitration and strike class claims under the Florida Deceptive and Unfair Trade Practices Act (FDUPTA), based on arbitration agreements each plaintiff executed in connection with their employment as a driver, was granted by the federal district court in Tampa, Florida (Suarez v. Uber Technologies, Inc., May 5, 2016, Moody, J.).

Antonia Suarez and three other individuals signed up to use Uber’s smartphone application as drivers. The application allows riders and drivers to connect based on their locations. In order access the uberX platform to accept ride requests, the plaintiffs were first required to electronically accept Uber’s services agreement.

The services agreement contained: (1) an arbitration provision which required transportation providers, if they did not opt out, to arbitrate all disputes; and (2) a delegation clause that required arbitration of all disputes regarding the arbitration provision. The plaintiffs were free to reject the arbitration provision without consequence to their relationship with Uber but did not do so. After confirming their review of the services agreement, the plaintiffs were given an additional 30 days to opt out of the arbitration clause.

The plaintiffs brought an action alleging that Uber misclassified them and other drivers as independent contractors, rather than as employees, and asserting claims of unpaid wages under FDUPTA and the Fair Labors Standard Act (FLSA). Uber responded by filing a motion to compel arbitration and strike the class allegations based on arbitration agreements that each plaintiff executed in connection with their employment.

The plaintiffs did not dispute that the services agreement was a valid contract or that they did not opt out of the arbitration. Instead, they argued that the arbitration provision was unconscionable. The court, however, agreed with Uber that, through the delegation clause, the parties clearly and unmistakably agreed to arbitrate questions of arbitrability, including whether the arbitration provision was unconscionable.

Additionally, the court found that the arbitration provision was not procedurally unconscionable because the plaintiffs were not required to accept it in order to be an Uber driver. The arbitration provision also was not substantively unconscionable. The plaintiffs’ argument that the provision’s fee-splitting clause rendered the contract one-sided and unfair was rejected. The court noted that the plaintiffs did not establish that the fee-splitting clause would render the cost of arbitration prohibitively or unfairly expensive.

Finally, the waiver of class claims did not render the arbitration clause unconscionable. The court concluded that it was unnecessary to decide whether the class action waiver was unconscionable under Florida law, or frustrated the remedial purposes of FDUPTA, because it would still be preempted by the Federal Arbitration Act.

The case is No. 8:16-cv-166-T-30MAP.

Attorneys: Brandon J. Hill (Wenzel Fenton Cabassa, PA) for Antonio Suarez. Courtney B. Wilson (Littler Mendelson, PC) for Uber Technologies, Inc.

Companies: Uber Technologies, Inc.

Cases: StateUnfairTradePractices FloridaNews