Aleksanian v. Uber Technologies Inc.

Background

Levon Aleksanian, Sonam Lama, and Harjit Khatra sued Uber Technologies Inc., Uber Logistik, LLC, and Uber USA LLC. They brought breach-of-contract claims individually, for a proposed class of similarly situated drivers, and as proposed class representatives. The plaintiffs alleged that Uber improperly deducted sales tax and a Black Car Fund surcharge from driver earnings and used an “Upfront Pricing” system that sometimes charged customers more than the amount used to calculate drivers’ earnings.

The plaintiffs had accepted Uber software or technology-services agreements containing arbitration provisions. Those provisions required covered disputes to be resolved through final and binding arbitration on an individual basis rather than in court or through a class, collective, or representative action. The plaintiffs admitted that they accepted the agreements and did not opt out of arbitration.

Motions and Legal Standard

Uber moved to compel arbitration under the Federal Arbitration Act (FAA), the federal law governing enforcement of many arbitration agreements. The plaintiffs moved for discovery about interstate trips and trips to airports or transportation hubs, arguing that this information could show they belonged to a class of workers exempt from the FAA.

The court explained that it had to determine whether the FAA exemption applied, whether the parties entered into a valid arbitration agreement, and whether the plaintiffs’ claims fell within that agreement’s scope. Because the court found that the interstate-commerce issue could be decided from the complaint and incorporated agreements, it denied the request for discovery.

FAA Exemption

The FAA does not apply to certain transportation workers engaged in interstate commerce. The court stated that this exemption is limited to transportation workers and focuses on the class of workers to which the plaintiffs belong, not only on whether an individual worker occasionally crossed state lines.

The court held that Uber drivers were not a class of workers engaged in interstate commerce. It reasoned that Uber’s business was generally providing rides rather than providing interstate transportation, and that the drivers’ work predominantly involved intrastate trips. The plaintiffs’ individual interstate-trip statistics, airport-related trips, and Uber policies accommodating occasional interstate rides did not establish that interstate transportation was central to the job. The court therefore ruled that the plaintiffs were not exempt from the FAA under its transportation-worker provision.

The court expressly did not reach whether the agreements were employment contracts or whether passenger-transportation workers, as opposed to goods-transportation workers, could qualify for the exemption.

Arbitration Agreement and Disposition

The court held that the parties entered into valid arbitration agreements and that the plaintiffs’ claims fell within those agreements’ broad language covering disputes arising from the agreements and the plaintiffs’ relationship with Uber. The court therefore granted Uber’s motion to compel arbitration and ordered the parties to proceed to arbitration.

The court denied the plaintiffs’ motion for discovery and dismissed the case. The opinion also states that the plaintiffs’ request for a conference and leave to amend the complaint to add New York Labor Law claims was denied because those claims would also be subject to arbitration and the amendment would be futile. The court did not decide whether Uber breached the contracts or whether the plaintiffs were entitled to damages.