Ninth Circuit Denies Rehearing En Banc, Requires Ex-Uber Drivers To Arbitrate Claims Individually.


The Ninth Circuit denied rehearing en banc of its September order holding that the district court erred in deciding whether two drivers who sued Uber Technologies, Inc. ("Uber") on behalf of themselves and a putative class over the use of background checks must arbitrate their claims individually. The consolidated cases concerned both 2013 and 2014 versions of agreements Uber drivers were required to sign. The agreements included mandatory arbitration clauses, and class action, collective action, and Private Attorney General Act (PAGA) claim waivers. In addition, the agreements contained delegation clauses providing that disputes regarding arbitrability, would be resolved by an arbitrator. Importantly, the 2013 agreements, unlike the 2014 agreements, required the district court, not the arbitrator, to consider certain challenges to the arbitration provision, including challenges to the enforceability of the PAGA waivers.

The plaintiffs, Gillette and Mohamed, entered agreements in 2013 and 2014, respectively, and began driving for Uber. Uber subsequently terminated both plaintiffs' access to the Uber application due to negative information on their consumer credit reports. The plaintiffs filed separate suits in California, alleging, among other claims, violations of the Fair Credit Reporting Act, and bringing PAGA claims. Uber moved to compel arbitration in both suits, and the district court denied both motions, concluding that, although the agreements contained arbitration clauses and collective action waivers, the issue of arbitrability was not "clear and unmistakable." Further, the district court reasoned that, even if the arbitration clauses were "clear and unmistakable," they were unenforceable because they were unconscionable. Regarding both plaintiffs' PAGA claims, the district court concluded that the PAGA waivers were substantively unconscionable and that plaintiffs were permitted to proceed in litigating those claims.

In September, the Ninth Circuit reversed the district court's holdings on the majority of the arbitration issues. The Ninth Circuit held that neither the 2013 nor the 2014 agreements' delegations...

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