Ferreira v. Uber Technologies, Inc.

Background

Christina Ferreira worked as an Uber driver from approximately April 2022 through the date of the opinion. To use Uber’s driver application, she entered platform agreements with Uber-related companies, including Rasier, Schleuder, and Portier. Each agreement contained an arbitration provision requiring covered disputes to be resolved individually through final and binding arbitration, along with a class-action waiver.

The agreements also allowed drivers to opt out of arbitration within 30 days. Ferreira timely opted out of the arbitration provision in the agreement with Rasier, but she did not opt out of the provisions in the Schleuder or Portier agreements.

Ferreira and three other individuals originally brought a proposed class action against Uber, Rasier, Schleuder, and Portier. The court later dismissed the other individuals’ claims and Ferreira’s claims against Schleuder and Portier. The remaining case involved Ferreira’s Fair Labor Standards Act claim against Uber and Rasier.

Motion to Compel Arbitration

Uber and Rasier moved to compel arbitration under the Schleuder and Portier agreements. The parties agreed that those agreements were valid arbitration agreements. They disagreed about whether Uber and Rasier, which were not signatories to those particular agreements, could enforce them.

The court first considered who should decide whether Uber and Rasier could enforce the arbitration provisions. The agreements delegated certain questions about arbitrability to an arbitrator, but the court held that this delegation did not clearly and unmistakably apply to Uber and Rasier as nonsignatories. The court therefore decided the enforcement issue itself.

Under California law, a nonsignatory may enforce an arbitration agreement as a third-party beneficiary. A third-party beneficiary is someone who, although not a signatory, was intended to benefit from a contract and may enforce it in appropriate circumstances.

The court found that the agreements expressly covered disputes involving the signatories’ affiliates and parent companies and stated that those entities could enforce the arbitration provisions as third-party beneficiaries. The court determined that Uber was Schleuder and Portier’s parent company and that Rasier was their affiliate because the companies were under common ownership. The court also concluded that allowing Uber and Rasier to compel arbitration of employment-related disputes was consistent with the agreements’ objectives and the parties’ reasonable expectations.

The court rejected Ferreira’s arguments that Uber and Rasier had to be specifically named and that the third-party-beneficiary language was ambiguous. It also held that Ferreira’s decision to opt out of the Rasier arbitration provision did not invalidate the separate arbitration provisions in the Schleuder and Portier agreements.

Ruling and Case Status

Judge Jon S. Tigar granted the defendants’ motion to compel arbitration. The court stayed the case and directed the parties, within 14 days after completing arbitration, to jointly report the outcome and request either dismissal of the case or reopening of the case with a case-management conference. In the meantime, the Clerk was directed to administratively close the case.