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Tech industry awaiting Supreme Court contract dispute ruling

One rising star in the technology industry in California is the ridesharing company, Uber. However, just like any other company, Uber is not immune to employee complaints. In fact, one employee's case against Uber has reached the Supreme Court, and the technology industry is keeping a keen eye on the outcome of this case.

The dispute is a contract dispute. The woman who is pursuing the lawsuit against Uber had signed a contract that required her to go through private arbitration if she had a dispute with the company. The contract also required her to give up her right to join a class action lawsuit against the company. The Court will consider whether such clauses are enforceable.

This is important for many tech companies, as these types of mandatory individual arbitration clauses in employment contracts are commonplace among them. The woman's attorneys claim that such clauses prevent workers from taking collective action against their employer, which reportedly violates federal law. Her attorneys argue that the company's purpose in such clauses is to protect itself from liability should it engage in illegal conduct.

Primarily, what is at stake is whether an employer can force a worker to relinquish his or her right to join a class action lawsuit against the employer. This is important, since while a lawsuit brought by an individual might cost a company thousands, a class action lawsuit could cost a company millions.

On one hand, some say that arbitration puts workers in a less favorable position, as the issue being arbitrated is not part of the public record, the worker may not be able to receive all the documentation they need from their employer and arbitration could limit a worker's ability to appeal the arbitrator's decision. On the other hand, the U.S. Department of Justice has taken the side of Uber in this case. Moreover, the Supreme Court previously ruled that when it comes to consumer contracts, contract provisions prohibiting class action contracts were legal. Time will tell how this suit against Uber will play out.

We hope that the above provides an insight into this business compliance practice. Please feel free to contact our firm if you have any questions. This is an advertisement for legal services. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Source: Wired, "Big Tech Eyes Supreme Court's Employee-Arbitration Case," Nitasha Tiku, Oct. 2, 2017

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