- A North Carolina federal court has granted preliminary class-action status to a lawsuit filed by Uber drivers, allowing them to move forward with their case against the ride-hailing company, reports The New York Times. The drivers are alleging violations of the Fair Labor Standards Act.
- The order authorizes the plaintiffs to include about 18,000 other drivers in the suit, who turned down the arbitration option in their contracts, says the New York Times. About 600,000 drivers work for Uber in the U.S.
- The drivers are challenging the company's alleged misclassification of them as independent contractors instead of employees.
Another potential blow for Uber. Right now, the company is trying to rebuild a culture racked by sexual harassment and sex discrimination allegations and CEO Travis Kalanick's resignation. Not to mention successive other misclassification cases that have poked holes in the independent contractor defense. Uber has racked up a few losses in New York over unemployment payments.
If the current decision is accepted after the discovery phase, it could cause major problems for the company. Uber did seem to have a defense in place — namely, the arbitration clauses that blocked a slew of workers from participating in the class action. But those types of agreements are currently under scrutiny by the courts, as well. SCOTUS is expected to rule on arbitration clauses soon.
Overall, the debate around independent contractors continues across the country in a variety of industries, further sparked by the explosive growth of the gig economy. Unfortunately, definitive answers either way remain few and far between. Most employers can take caution by limiting the control they exercise over their contracted workforce to ensure they remain truly "independent."