Dive Brief:
- Uber continues to generate headlines via the courts as it defends its business model. In the past week, the Ninth Circuit federal appeals court agreed to hear the appeal of a judge’s December order that certified class action against the company. Then, just yesterday, Uber agreed to pay at least a $10 million settlement in a California case over its driver vetting process, Reuters reports.
- With the trial set for June, the appeals court decision issued a reprieve for Uber in its quest to avoid a class-action case certified by U.S. District Court Judge Edward Chen. If the class-action certification is allowed to stand, the case could determine if Uber, and by extension other on-demand employers, are employing full-time employees or contractors.
- Yesterday's multi-million dollar settlement relates to a 2014 lawsuit filed by district attorneys in San Francisco and Los Angeles who disputed Uber's claim that the company's background checks were superior to those used by competitors.
Dive Insight:
According to Uber, Chen's decision invalidated more than 150,000 arbitration contracts in which drivers waived their right to participate in class actions, and blocks Uber from looking to enlist new drivers using a modified arbitration contract, Forbes reports.
In the background check settlement, Uber did not admit wrongdoing. At the heart of the case: Uber doesn't require fingerprint records for drivers, a concrete way to detect criminal records. Rather, it had used databases that only contained seven years of data, according to Reuters.
The agreement bars Uber from overstating its background check process, including ceasing from calling itself the "safest ride on the road" or calling its background checks "the gold standard," according to Reuters, which noted that if Uber does not follow the agreement, it could end up paying a $25 million fine.
