Uber’s business model that refers to their employees as independent contractors might be at risk after the California Supreme Court ruled on Monday that the company must face a lawsuit from UberEats driver Erik Adolph.
In a lawsuit he made in 2019, Adolph argued that Uber “misclassified” UberEats drivers as independent contractors rather than employees. This allowed the company to avoid paying work-related expenses, which are required by California laws.
The company challenged the lawsuit, arguing that Adolph waived his right to sue after signing an agreement that all of his work-related legal claims would be handled in private arbitration. However, the judges of the California Supreme Court unanimously disagreed, saying that Adolph can take Uber to court despite the agreement and that the company has to face it.
Adolph made his Uber lawsuit under California’s Private Attorney General Act, which gives workers the ability to sue their employers for employment law violations on behalf of the state of California. In case the plaintiff wins the case, they are allowed to keep one-quarter of the money they win while the state’s agency that enforces labor laws gets the rest.
After the ruling, Uber’s lawyer Theane Evangelis said the company would most likely appeal the decision.
“We are considering our appellate options,” Evangelis said.