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Johnston v. Uber Technologies, Inc.

United States District Court, N.D. California

September 16, 2019





         Plaintiff Todd Johnston (“Plaintiff”) filed a class action lawsuit against Defendant Uber Technologies, Inc. (“Defendant”). Mr. Johnston asserts one cause of action: a violation of the WARN Act, 29 U.S.C. § 2102 et seq. He contends that Uber Technologies violated the WARN Act when it ceased operations in Austin, Texas without providing WARN Act notice to drivers at least 60 days in advance. Uber argues that this matter is not properly before the Court because Mr. Johnston agreed to bring this dispute in arbitration.

         In April 2017, Defendant filed a Motion to Compel Arbitration. On June 22, 2017, the Court stayed this matter because of pending appeals at the Ninth Circuit regarding the validity of Defendant's arbitration agreements (O'Connor et al. v. Uber Technologies, Inc., Ninth Circuit No. 15-17475). In March 2018, the Court administratively denied without prejudice Defendant's Motion to Compel Arbitration because of the length of the pendency of the O'Connor appeal. In September 2018, the Ninth Circuit reversed this Court's Order denying Uber's Motion to Compel Arbitration in O'Connor. On July 11, 2019, Defendant refiled a Motion to Compel Arbitration (“Motion”). Defendant asks that the Court “order Plaintiff to individually arbitrate his claims against Defendants [sic] and dismiss his Complaint.” Plaintiff asks that the Court “find Uber's class action waiver unenforceable and void and deny Uber's Renewed Motion to Compel Arbitration.”


         A. Complaint

         According to the Class Action Complaint, Mr. Johnston “is a citizen of Texas, domiciled in Austin, Texas.” Class Action Complaint (“Complaint”) ¶ 1; Docket No. 1. Uber “is a San Francisco, California-based car service promoting itself as a transportation networking company.” Id. ¶ 6. Uber “began operating in Austin, Texas on or about June 3, 2014.” Id. ¶ 8. Mr. Johnston “began working as an Uber driver starting in May 2015, ” and he continued to drive “for Uber as his primary source of income until May 9, 2016.” Id. ¶ 1. On May 9, 2016, after losing a public referendum to repeal an ordinance requiring transportation network companies-including Uber- to beef up their background check procedures, Uber decided to immediately terminate operations in Austin. Id. 10-13.

         The complaint alleges that “thousands of Austin Uber Drivers . . . lost their jobs and incomes” as a result. Id. ¶ 14. At the time Uber stopped its Austin-based operations, “Uber officials asserted that Uber had over 10, 000 Drivers in Austin.” Id. ¶ 9. Mr. Johnston contends that he and other class members are “employees” of Uber, and that they were “entitled to WARN Act notice” as “affected employees.” Id. 15-17. Under the WARN Act, affected employees are entitled to “sixty (60) days notice prior to effectuating either a ‘plant closing' or ‘mass layoff'” Id. ¶ 21; 29 U.S.C § 2102. A violation of the Act “occurs when an employer does not provide the proper notice within the proper timeframe.” Complaint ¶ 22.

         B. The Arbitration Agreement

         At issue in this case is whether the parties' Arbitration Agreement requires this dispute to be settled before an arbitrator on an individual basis. Defendant alleges that “Plaintiff signed up to use the Uber App to generate leads for potential riders . . . in Austin, Texas, and his account was activated on May 22, 2015.” Motion at 4. He could not use the app without “accepting] the applicable [Software License & Online Services] agreement with Rasier [a wholly-owned subsidiary of Uber].” Id. At the time of Plaintiff s account activation, “the applicable agreement was the November 2014 Rasier Agreement.” Id. To accept the agreement, Plaintiff had to sign into the app and click “YES, I AGREE” when prompted to confirm his acceptance of the agreement two times. Id. Defendant contends that the agreement “was available for review by clicking a hyperlink presented on the screen. . . . [And] Plaintiff was free to spend as much time as he wished reviewing the November 2014 Rasier Agreement.” Id. Plaintiff accepted the November 2014 Agreement on the same day he activated his account. Id. That agreement contained an arbitration provision, and Plaintiff did not opt out of that provision. Id. at 4-5.

         “In December 2015, Uber rolled out a revised agreement.” Id. at 5. Prior to the rollout, “drivers were sent an e-mail notifying them of the new agreement and Arbitration Provision contained therein.” Id. Defendant alleges that Plaintiff “accepted the December 2015 [Agreement] through the Uber App on December 15, 2015, using the same process [as for the November 2014 Agreement].” Id. Defendant contends that the December 2015 Agreement “is the operative agreement in this matter.” Id. Uber further contends that Plaintiff “could have opted out [of the Arbitration Provision] using a variety of methods, including by simply sending an email to” Id. at 6. But Plaintiff “did not opt out of arbitration, ” although “thousands of drivers have opted out of one or more of the arbitration provisions contained in the various agreements in place between Uber and the drivers who use the Uber App.” Id. at 7.

         The relevant text of the Arbitration Provision is as follows:

This Arbitration Provision is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the “FAA”) and evidences a transaction involving interstate commerce. This Arbitration Provision applies to any dispute arising out of or related to this Agreement or termination of the Agreement and survives after the Agreement terminates...
Except as it otherwise provides, this Arbitration Provision is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law or before any forum other than arbitration, with the exception of proceedings that must be exhausted under applicable law before pursuing a claim in a court of law or in any forum other than arbitration. Except as it otherwise provides, this Arbitration Provision requires all such disputes to be resolved only by an arbitrator through final and binding arbitration on an ...

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