Why Aren’t More Employees Suing Uber?
▻https://www.wired.com/story/uber-susan-fowler-travis-kalanick-arbitration
WHEN UBER COFOUNDER Travis Kalanick announced his resignation as CEO on Tuesday, many of those who pushed for his ouster after years of management scandals credited Susan Fowler. In February, the former Uber engineer published a blog post outlining the sexual harassment, retaliation, and gender discrimination she claims to have experienced there. Uber promptly hired former US attorney general Eric Holder to investigate. On June 13, Uber released Holder’s recommendations for fixing the company’s noxious culture, and his suggestions included a diminished role for Kalanick. The embattled CEO took a leave of absence later that day; he resigned one week later amid pressure from investors.
While it’s easy to trace the tremendous impact Fowler had on the $70 billion transportation juggernaut, Fowler—like other current and former Uber employees—probably won’t see her day in court. Uber’s employment contract required signing a binding arbitration agreement stipulating that cases be settled privately by an arbiter instead of a jury. (The company says employees now have 30 days to opt out but did not say when it started allowing them to do so.) The arbitration agreement, like many others, also curbs class-action lawsuits by requiring employees to arbitrate disputes individually, although they can opt out of this too. (Uber requires drivers and riders to also sign arbitration agreements, but the language varies.)
One current engineer told WIRED that Uber’s arbitration agreement has kept at least two people from suing the company for sexual harassment and gender discrimination. Although signing the agreement does not preclude employees from filing suit, the engineer believes that Uber recognizes the chilling effect of mandatory arbitration. “When all of this went down, Uber was smart," the engineer says. “They hired Holder, and this made me realize that no other engineer would be seeking legal action against Uber, either. Who would want to go against the ex-attorney general of the US?”
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Like some other employers, Uber’s arbitration agreement includes a waiver if employees want to file their complaint with an agency like the Equal Employment Opportunity Commission. Employers don’t worry much about this because government agencies have such a heavy workload, says Ramsey Hanafi, a partner at Quintana Hanaf who is representing a client with a pending lawsuit against WeWork.
Hanafi notes that California offers some of the nation’s strictest worker protections, but “then we run into the problem of arbitration, which kind of takes that completely out of the equation." Companies “routinely insist on these clauses, but they see it as a scare tactic."
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One of the most significant business cases that the Supreme Court will hear during its next term, National Labor Relations Board v. Murphy Oil USA, argues that arbitration clauses prevent employees from bringing class actions. On June 16, the Department of Justice suddenly abandoned its support for workers in a case that cites a New York Times investigation into arbitration as a means of privatizing the justice system.
“Part of the problem nowadays is that you’re waiving your constitutional civil rights,” says Organ, who believes arbitration agreements strongly dissuades employees from suing. “They see the system as rigged in favor of the company, as it is.”