O'Connor v. Uber Technologies, Inc.
O'Connor v. Uber Technologies, Inc.
Opinion of the Court
ORDER DENYING DEFENDANT UBER TECHNOLOGIES, INC.’S MOTION FOR SUMMARY JUDGMENT
(Docket No. 211)
Plaintiffs filed this putative class action on behalf of themselves and other similarly situated individuals who drive for Defendant Uber Technologies, Inc. See Docket No. 201-2 (Second Amended Class Action Complaint) (SAC). Plaintiffs claim that they are employees of Uber, as opposed to its independent contractors, and thus are eligible for various statutory protections for employees codified in the California Labor Code, such as a requirement that an employer pass on the entire amount of any gratuity “that is paid, given to, or left for an employee by a patron.” Cal. Lab. Code § 351; see also SAC at ¶¶ 27-28.
Pending before the Court is Uber’s motion for summary judgment that Plaintiffs are independent contractors as a matter of law. As is discussed below, the Court first concludes that Plaintiffs are Uber’s presumptive employees because they “perform services” for the benefit of Uber. The Court next holds that whether an individual should ultimately be classified as an employee or an independent contractor under California law presents a mixed question of law and fact that must typically be resolved by a jury. Finally, because a number of facts material to the employee/independent contractor determination in this case remain in dispute, the Court denies Uber’s summary judgment motion.
I. BACKGROUND
In a nutshell, Uber provides a service whereby individuals in need of vehicular transportation can log in to the Uber software application on their smartphone, request a ride, be paired via the Uber application with an available driver, be picked up by the available driver, and ultimately be driven to their final destination. Uber receives a credit card payment from the rider at the end of the ride, a significant portion of which it then remits to the driver who transported the passenger.
Named plaintiffs Douglas O’Connor and Thomas Colopy drive principally for Uber’s “UberBlack”'service.
Before becoming “partners” with Uber, Plaintiffs and other aspiring drivers must first complete Uber’s application process. See Docket No. 223-20; Docket No. 223-28. Applicants are required to upload their driver’s license information, as well as information about their vehicle’s registration and insurance. Docket No. 223-28 at 2. Applicants must also pass a background check conducted by a third party. Id. at 3. Would-be drivers are further required to pass a “city knowledge test” and attend an interview with an Uber employee.
Once a prospective driver successfully completes the application and interview stages, the driver must sign contracts with Uber or one of -Uber’s subsidiaries (Raiser LLC). See Docket No. 223-15 (Transportation Provider Service Agreement) (Service Agreement); see also Docket No. 223-16 (Driver Addendum Related to Uber Services) (Addendum).
In this litigation, Uber bills itself as a “technology company,” not a “transportation company,” and describes the software it provides as a “lead generation platform” that can be used to connect “businesses that provide transportation” with passengers who desire rides. Docket No. 213 (Colman Decl.) at ¶ 6. Uber notes that it owns no vehicles, and contends that it employs no drivers. Id. Rather, Uber partners with alleged independent contractors that it frequently refers to as “transportation providers.” Id.
Plaintiffs characterize Uber’s business (and their relationship with Uber) differently. They note that while Uber now disclaims that it is a “transportation company,” Uber has previously referred to itself as an “On-Demand Car Service,” and goes by the tagline “Everyone’s Private Driver.”
Moreover, Uber does not sell its software in the manner of a typical distributor. Rather, Uber is deeply involved in marketing its transportation services, qualifying and selecting drivers, regulating and monitoring their performance, disciplining (or terminating) those who fail to meet standards, and setting prices.
In addition to contending it is a technology company and not a transportation company, Uber argues the drivers are not
II. DISCUSSION
A. Applicable Legal Standards
1. Summary Judgment Standard
This Court may only grant summary judgment in favor of Uber if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Alexander v. FedEx Ground Package Sys., Inc., 765 F.3d 981, 987 (9th Cir. 2014). That is, Uber is entitled to summary judgment only if, viewing the evidence in the light most favorable to the drivers, this Court necessarily must conclude that Plaintiffs are independent contractors as a matter of law. See id. at 988.
2. California’s Test of Employment
The parties agree that determining whether Plaintiffs are employees or independent contractors is an analysis that proceeds in two stages. “First, under California law, once a plaintiff comes forward with evidence that he provided services for an employer, the employee has established a prima facie case that the relationship was one of employer/employee.” Narayan v. EGL, Inc., 616 F.3d 895, 900 (9th Cir. 2010) (citation omitted). “As the Supreme Court of California has held ... the fact that one is performing work and labor for another is prima facie evidence of employment and such person is presumed to be a servant in the absence of evidence to the contrary.” Id. at 901. (citation and internal quotation marks omitted) (internal modifications omitted). If the putative employee establishes a prima facie case (ie., shows they provided services to the putative employer), the burden then shifts to the employer to prove, if it can, that the “presumed employee was an independent contractor.” Id. (citations omitted); see also Yellow Cab Coop. Inc. v. Worker’s Comp. Appeals Bd., 226 Cal.App.3d 1288, 1294, 277 Cal.Rptr. 434 (1991) (explaining that under California law there is “a presumption that a service provider is presumed to be an employee unless the principal affirmatively proves otherwise”).
For the purpose of determining whether an employer can rebut a prima facie showing of employment, the Supreme Court’s seminal opinion in Borello “enumerated a number of indicia of an employment relationship.” Narayan, 616 F.3d at 901. The “most significant consideration” is the putative employer’s “right to control work details.” S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations (Borello), 48 Cal.3d 341, 350, 256 Cal.Rptr.. 543, 769 P.2d 399 (1989). This right of control need not extend to every possible detail of the work. Rather, the relevant question is whether the entity retains “all necessary control” over the worker’s performance. Id. at 357, 256 Cal.Rptr. 543, 769 P.2d 399
The Supreme Court has further emphasized that the pertinent question is “not how much control a hirer exercises, but how much control the hirer retains the right to exercise.” Ayala v. Antelope Valley Newspapers Inc., 59 Cal.4th 522, 533, 173 Cal.Rptr.3d 332, 327 P.3d 165 (2014) (citation omitted) (emphases in the original). When evaluating the extent of that control, the Supreme Court has stressed that an employer’s “right to discharge at will, -without cause” is “strong evidence in support of an employment relationship.” Borello, 48 Cal.3d at 350, 256 Cal.Rptr. 543, 769 P.2d 399; see also Ayala, 59 Cal.4th at 531, 173 Cal.Rptr.3d 332, 327 P.3d 165 (characterizing the right to discharge without cause as “[p]erhaps the strongest evidence of the right to control”); Narayan, 616 F.3d at 900 (characterizing the right to discharge at will as the “most important” factor for determining whether an employment relationship exists). This is because the “power of the principal to terminate the services of the agent [without cause] gives him the means of controlling the agent’s activities.”
The putative employer’s right to control work details is not the only relevant factor, however, and the control test cannot be “applied rigidly and in isolation.” Borello, 48 Cal.3d at 350, 256 Cal.Rptr. 543, 769 P.2d 399. Thus, the Supreme Court has also embraced a number of “secondary indicia” that are relevant to the employee/independent contractor determination. Id. These additional factors include:
(a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee.
Id. at 351, 256 CaLRptr. 543, 769 P.2d 399. Borello also “approvingly cited” five additional factors (some overlapping or closely related to those outlined immediately above) for evaluating a potential employment relationship. Narayan, 616 F.3d at 900. These additional factors include:
(1) the alleged employee’s opportunity for profit or loss depending on his managerial skill; (2) the alleged employee’s investment in equipment or materials required for his task, or his employment of helpers; (3) whether the service rendered requires a special skill; (4) the degree of permanence of the working relationship; and (5) whether the service rendered is an integral part of the alleged employer’s business.
Indeed, this Court’s extensive survey of the caselaw confirms that no one Borello factor is dispositive when analyzing employee/independent contractor status. For instance, in Mission Ins. Co. v. Workers’ Comp. Appeals Bd., the Court of Appeal reversed a determination made by the Workers’ Compensation Appeals Board that an individual was an employee of his putative employer. 123 Cal.App.3d 211, 213, 176 CaLRptr. 439 (1981). The Court of Appeal held instead that the individual was an independent contractor as a matter of law. Id. at 219,176 CaLRptr. 439. One piece of evidence the Court of Appeal relied on in reaching this conclusion was that whereas a “regular employee applicant worked a normal eight-hour shift,” plaintiff “did not work any specific hours.” Id. at 216, 176 CaLRptr. 439. But the same was true of the putative employee in a later case, where the Court of Appeal determined that an employment relationship did exist as a matter of law. See Air Couriers Int’l, 150 Cal.App.4th at 926, 59 Cal.Rptr.3d 37 (package delivery drivers were employees of their courier company as a matter of law even though “individual drivers determined their own schedules and decided when and how long to work”); see also JKH Enterprises, Inc. v. Dep’t of Indus. Relations, 142 Cal.App.4th 1046, 1052, 48 Cal.Rptr.3d 563 (2006) (holding that delivery drivers were employees of courier service, despite the fact that “drivers set their own schedules”).
The flexibility (and variability) of the Borello test can further be demonstrated by comparing Mission with Alexander. In Mission, the Court of Appeal found the putative employee was an independent contractor despite the fact that he was required to wear a uniform displaying his putative employer’s insignia. Mission Ins. Co., 123 Cal.App.3d at 217, 176 Cal.Rptr. 439. Yet, the same fact supported a conclusion in Alexander that plaintiffs were FedEx’s employees as a matter of law. Alexander, 765 F.3d at 987 (noting that the fact that drivers were required to “wear a FedEx uniform” supported finding of employee status) (internal quotation marks omitted). And while in Mission, the Court of Appeal found independent contractor status at least in part because the putative employee used his own personal vehicle while on the job, 123 Cal. App.3d at 216, 176 CaLRptr. 439, the same fact has proved not to be dispositive in Alexander and in numerous other California cases where an employment relationship was found. See Alexander, 765 F.3d at 986 (“FedEx requires its drivers to provide their own vehicles”); Air Couriers Int’l, 150 Cal.App.4th at 927, 59 Cal. Rptr.3d 37 (“Drivers supplied their own vehicles ... when delivering for [defendant]”); JKH Enterprises, Inc., 142 Cal.App.4th at 1051, 48 Cal.Rptr.3d 563 (“All
Put simply, the cases bear out the Supreme Court’s exhortation that the weight given to the Borello factors “depends on [their] particular combinations.” Borello, 48 Cal.3d at 351, 256 CalRptr. 543, 769 P.2d 399. It is with these principles in mind that the Court now turns to the merits of Uber’s summary judgment motion.
B. The Plaintiffs Are Uber’s Presumptive Employees Because They Provide a Service to Uber
If Plaintiffs can establish that they provide a service to Uber, then a rebutta-ble presumption arises that they are Uber’s employees. See Narayan, 616 F.3d at 900; Yellow Cab Coop., 226 Cal. App.3d at 1294, 277 CalRptr. 434. Uber argues that the presumption of employment does riot apply here because Plaintiffs provide it no service. ’ The central premise of this argument is Uber’s contention that it is not a “transportation company,” but instead is a pure “technology company” that merely generates “leads” for its transportation providers through its software. Using this semantic framing, Uber argues that Plaintiffs are simply its customers who buy dispatches that may or may not result in actual rides. In fact, Uber notes that its terms of service with riders specifically state that Uber is under no obligation to actually provide riders with rides at all.
First, Uber’s self-definition as a mere “technology company” focuses exclusively on the mechanics of its platform (i.e., the use of internet enabled smartphones and software applications) rather than on the substance of what Uber actually does (ie., enable customers to book and receive rides). This is an unduly narrow frame.
Even more fundamentally, it is obvious drivers perform a service for Uber because Uber simply would not be a viable business entity without its drivers.
Furthermore, Uber not only depends on drivers’ provision of transportation services to obtain revenue, it exercises significant control over the amount of any revenue it earns: Uber sets the fares it charges riders unilaterally. See Coleman Depo. Tr. 165:2-21; 167:21-168:21; Docket No. 223-62. The record also shows that Uber claims a “proprietary interest” in its riders, which further demonstrates that Uber acts as more than a mere passive intermediary between riders and drivers. For instance, Uber prohibits its drivers from answering rider queries about booking future rides outside the Uber app, or otherwise “soliciting” rides from Uber riders. See, e.g., Handbook at 7 (providing that actively soliciting business from a current Uber client is categorized as a “Zero Tolerance” event that “may result in immediate suspension from the Uber network.” By contrast, “passive client solicitation (e.g., business cards or branded equipment in backseat)” is categorized as a “Major” issue that Uber “takes very seriously and will take action if you receive more than one in every 180 trips”); On-boarding Script at 10 (stating that if a rider specifically asks drivers about “arranging pickups, tell them to reach out to Uber”); Docket No. 223-13 at 6 (stating that riders cannot request specific Uber drivers).
As further indicia of its role as a transportation company rather than a software provider, Uber exercises substantial control over the qualification and selection of its drivers. Before becoming “partners” with Uber, aspiring drivers must first complete Uber’s application process, including a background check, city knowledge exam, vehicle inspection, and personal interview. See generally Docket No. 223-20; Docket No. 223-28. In an internal document ti-
Although the Court’s conclusion based on the record facts can likely stand on logic and common sense alone, the case law makes abundantly clear that the drivers are Uber’s presumptive employees. In Yellow Cab Cooperative, a cab company argued, like Uber here, that its drivers were not its employees because they did not provide any service to the cab company. Yellow Cab Coop., 226 Cal.App.3d at 1292-1294, 277 Cal.Rptr. 434. The company’s principal argument, like Uber’s, was that it was only in the business of collecting fees from its drivers — specifically a flat $56 fee-per-shift for the use of a cab and provision of “leads” through its radio dispatch service. Notably, (and unlike Uber) Yellow did not share in any of the actual fares a driver received. Id. at 1291, 277 CahRptr. 434. Thus, if a Yellow driver never provided any rides during a shift or actually used any of Yellow’s “leads,” Yellow would receive the same $56 lease payment regardless. Id. Based on these facts, the Court of Appeal flatly rejected Yellow’s argument that the drivers did not provide it a service, finding that Yellow’s actual “enterprise consists of operating a fleet of cabs for public carriage. The drivers, as active instruments of that enterprise, provide an indispensable ‘service’ to Yellow; the enterprise could no more survive without them than it could without working cabs.”
Uber cites two cases in support of its contention that it receives no services from its drivers, but neither case is on-point.
Without belaboring the multitude of differences between this case and Kubinec, the Court notes that Uber does not receive a flat fee from its drivers in exchange for an unlimited number of “leads” or dispatches. Rather, Uber receives a percentage of each and every fare its drivers labor to earn — a fact that, as indicated above, makes it clear that Uber receives a (very lucrative) service from its drivers and depends on its drivers’ performance of services for its revenues. Kubinec is thus completely distinguishable from the facts in this case.
Uber’s second case, Callahan v. City of Chicago, 78 F.Supp.3d 791, 2015 WL 394021 (N.D.Ill. 2015), is equally inapposite to the issues here. In Callahan, a Chicago taxicab driver sued the City of Chicago arguing that the City was her employer under the Fair Labor Standards Act. Id. at 793, 2015 WL 394021, at *1. According to the district court, the “critical question” in determining the viability of the driver’s claims was “whether the ‘business’ to which Callahan renders service is, in fact, the City’s business.” Callahan, 78 F.Supp.3d at 801, 2015 WL 394021, at *8.
This Court holds, as a matter of law, that Uber’s drivers render service to Uber, and thus are Uber’s presumptive employees.
C. Whether a Hiree is an Employee or Independent Contractor is a Mixed Question of Law and Fact Generally to be Decided by the Jury
Because the Court has determined that the Plaintiffs are Uber’s presumptive employees, the burden now shifts to Uber to disprove an employment relationship. Yellow Cab Coop., 226 Cal.App.3d at 1294, 277 Cal.Rptr. 434. As noted above, when determining under California law whether a putative employer can rebut a hiree’s pri-ma facie case of employment, the Court applies the multi-factor test laid out in the Supreme Court’s decision in Borello. Borello, 48 Cal.3d at 350, 256 Cal.Rptr. 543, 769 P.2d 399.
Both parties suggest that the employee/independent contractor question is one of law for ultimate resolution by the Court. See, e.g., Oral Arg. Tr. at 7:24-9:8. Both' parties, however, are mistaken. According to the California Supreme Court, the “determination of employee or independent contractor status is one of fact if dependent upon resolution of disputed evidence or inferences.” Id. at 349, 256 Cal. Rptr. 543, 769 P.2d 399. This rule is consistent with long standing California Supreme Court precedent. See Burlingham v. Gray, 22 Cal.2d 87, 100-101, 137 P.2d 9 (1943) (holding that the question of employee/independent contractor status
While Borello and other California decisions sometimes refer to the question of employee/independent contractor status as one of fact, other California decisions recognize that the ultimate determination is more accurately described as a mixed question of law and fact. See Hillen v. Indus. Acc. Comm’n, 199 Cal. 577, 580, 250 P. 570 (1926) (holding that determination of employment relationship under California law involves questions “of mixed law and fact”); Mission Ins. Co., 123 Cal.App.3d at 219, 176 Cal.Rptr. 439 (same); Chapman v. Edwards, 133 Cal.App. 72, 79, 24 P.2d 211 (Cal. 1933) (same); see also Pullman-Standard v. Swint, 456 U.S. 273, 289 n. 19, 102 S.Ct. 1781, 72 L.Ed.2d 66 (1982) (defining a mixed question of law and fact as one “in which the historical facts are admitted or established, the rule of law is undisputed, and the issue is whether the facts satisfy the statutory standard, or to put it another way, whether the rule of law as applied to the established facts is or is not violated”). Unless the facts are so clear that only one inference may reasonably be drawn, mixed questions of law and fact are for the jury. See Hana Fin., Inc. v. Hana Bank, — U.S. -, 135 S.Ct. 907, 911-912, 190 L.Ed.2d 800 (2015) (question of “tacking” in trademark cases is typically for jury resolution because it presents a mixed question of law and fact); see also S.E.C. v. Phan, 500 F.3d 895, 908-909 (9th Cir. 2007) (recognizing that mixed questions of law and fact are typically left for the jury); Delange v. Dutra Constr. Co., Inc., 183 F.3d 916, 919 (9th Cir. 1999) (same); Del Monte Dunes at Monterey, Ltd. v. City of Monterey, 95 F.3d 1422, 1428-1429 (9th Cir. 1996) (same). California law governing employee/independent contractor status appears no different.
Indeed, a number of recent California and Ninth Circuit cases expressly held that the precise question of whether one is an employee versus independent contractor is generally a question of fact. For instance, in Estrada v. FedEx Ground Package Sys., Inc., the Court of Appeal held that “[t]he determination (employee or independent contractor) is one of fact....” 154 Cal.App.4th 1, 11, 64 Cal. Rptr.3d 327 (2007). Similarly in Millsap v. Federal Express Corp., the Court of Appeal noted that “[wjhether a person is an employee or an independent contractor is ordinarily a question of fact.” 227 Cal. App.3d 425, 431, 277 Cal.Rptr. 807 (1991). The panel noted unremarkably that employee/independent contractor status is only a legal question for the court’s resolution “if from all the facts only one inference may be drawn.” Id.; see also Arzate v. Bridge Terminal Transport, Inc., 192 Cal.App.4th 419, 427-428, 121 Cal.Rptr.3d 400 (2011) (reversing summary judgment that plaintiffs were independent contractors because “a reasonable trier of fact, considering the totality of the evidence, might reasonably conclude that the plaintiffs were employees of defendant”).
if we are to have multiple factors, we should also have a trial. A fact-bound approach calling for the balancing of incommensurables, an approach in which no ascertainable legal rule determines a unique outcome, is one in which the trier of fact plays the principal part. That there is a legal overlay to the factual question does not affect the role of the trier of fact.
Id. (quoting Sec’y of Labor v. Lauritzen, 885 F.2d 1529, 1542 (7th Cir. 1987) (Easter-brook, J., concurring) (internal modification omitted).
Because the Ninth Circuit’s holding in Narayan is binding on this Court, its determination that employee/independent contractor status is a mixed question of law and fact under California law is dispos-itive.
In Hana, the question at issue was one of trademark law, and specifically “tacking,” which allows a trademark owner to “make certain modifications to their marks over time without losing [the] priority ... position of an older mark.” Id. at 909. Tacking is permitted when the original and revised marks are “legal equivalents” such that the two marks “create the same, continuing commercial impression so that consumers consider both as the same mark.” Id. at 910 (internal quotation marks and citations omitted). The Supreme Court held that a jury should decide the ultimate question whether two marks are “legal equivalents” sufficient to warrant tacking. Id.
Justice Sotomayor began by explaining that “the application-of-legal-standard-to-fact sort of question ... commonly called a ‘mixed question of law and fact,’ has typically been resolved by juries.” Hana Financial, 135 S.Ct. 911 (quoting United States v. Gaudin, 515 U.S. 506, 512, 115 S.Ct. 2310, 132 L.Ed.2d 444 (1995)) (internal quotation marks omitted). As the Court has previously held, the “jury’s constitutional responsibility is not merely to determine the facts, but to apply the law to those facts and draw the ultimate conclusion.” Gaudin, 515 U.S. at 514, 115 S.Ct. 2310. “[A]n issue does not lose its factual character merely because its resolution is
The Court further explained that mixed questions of law and fact should be resolved by juries irrespective of whether this may permit juries to “create new law that will guide future ... disputes — a task [arguably] reserved for judges.” Id. The Court observed that “[i]t is not at all clear ... why a tacking determination in a particular case will ‘create new law5 any more than will a jury verdict in a tort case, a contract dispute, or a criminal proceeding.” Id. The Court also rejected the argument that allowing juries to make ultimate legal determinations, such as whether two marks are legally equivalent, would upset the “predictability required for a functioning trademark system.” Id. at 912. The unanimous Court explained that “the same could be said about the tort, contract, and criminal justice systems: In all of these areas, juries answer often-dispositive factual questions or make dispositive applications of legal standards to facts. The fact that another jury, hearing the same case, might reach a different conclusion may make the system ‘unpredictable,’ but it has never stopped us from employing juries in these analogous contexts.” Id.
Finally, the Court considered the argument that tacking disputes should be resolved by judges because judges have typically resolved such questions “as a historical matter.” Again, the Court rejected the argument, explaining that “petitioner relies on cases in which judges have resolved tacking disputes in bench trials, at summary judgment, or the like.” Id. (citations omitted). “As we have noted, it is undisputed that judges may resolve tacking disputes in those contexts. But recognizing as much does not gainsay our conclusion that, when a jury is to be empaneled and when the facts warrant neither summary judgment nor judgment as a matter of law, tacking is a question for the jury.” Id.
Put simply, the reasoning in Hana that juries should typically decide mixed questions of law and fact supports the great weight of California authority (including the Ninth Circuit’s decision in Narayan) that establishes that a hiree’s status as either an employee or independent contractor should typically be determined by a jury, and not the judge.
D. Uber is Not Entitled to Summary Judgment Because Material Facts Remain in Dispute and a Reasonable Inference of an Employment Relationship May Be Drawn
Because the ultimate determination of the Plaintiffs’ employment status presents a mixed question of law and fact, Uber may only obtain summary judgment if all facts and evidentiary inferences material to the employee/independent contractor determination are undisputed, and a reasonable jury viewing those undisputed facts and inferences could reach but one conclusion — that Uber’s drivers are independent contractors as a matter of law. See Alexander, 765 F.3d at 988. The Court explained at the hearing on this matter that this is a “pretty tough standard to meet,” Oral Arg. Tr. at 6:15, and it is one that Uber has failed to meet here.
As noted above, the “principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result
Uber further claims that the right to control element is not met because drivers can work as much or as little as they like, as long as they give at least one ride every 180 days (if on the uberX platform) or every 30 days (if on the UberBlack platform). Mot. at 20. According to Uber, drivers never have to accept any “leads” generated by Uber (ie., they can turn down as many rides as they want without penalty), and they can completely control how to give any rides they do accept. These contentions are very much in dispute. For instance, while Uber argues that drivers never actually have to accept ride requests when logged in to the Uber application, Plaintiffs provided an Uber Driver Handbook that expressly states: “We expect on-duty drivers to accept all [ride] requests.” Handbook at 1. The Handbook goes on to state that “[w]e consider a dispatch that is not accepted to be a rejection,” and we “will follow-up with all drivers that are rejecting trips.” Id. The Handbook further notes that Uber considers “[r]ejecting too many trips” to be a performance issue that could lead to possible termination from the Uber platform. Id. at 8; see also Docket No. 223-57 (email from Uber to driver stating that the driver’s “dispatch acceptance rate [of 60%] is too low ... Please work towards a dispatch acceptance rate of 80%. If you are unable to significantly improve your dispatch acceptance rate, Uber may suspend your account”).
It is also hotly disputed whether Uber has the right to significantly control the “manner and means” of Plaintiffs’ transportation services. See Alexander, 765 F.3d at 988. Plaintiffs cite numerous documents, written in the language of command, that instruct drivers to, amongst other things: “make sure you are dressed professionally;” send the client a text message when 1-2 minutes from the pickup location (“This is VERY IMPORTANT”); “make sure the radio is off or on soft jazz or NPR;” and “make sure to open the door for your client.” Onboarding Script at 3-6. As Uber emphasizes, “it is the small details that make for an excellent trip,” and Plaintiffs have presented evidence (when viewed in the light most favorable to them) that Uber seeks to control these details right down to whether drivers “have an umbrella in [their] car for clients
[[Image here]]
Docket No. 223-20.
Uber responds that it merely provides its drivers with “suggestions,” but does not actually require its drivers to dress professionally or listen to soft jazz or NPR. See, e.g., Reply Br. at 6. But the documents discussed above (and others in the record) are not obviously written as mere suggestions, and Uber’s arguments to the contrary cannot be assumed as true on Uber’s motion for summary judgment where all reasonable inferences from the record must be drawn in favor of Plaintiffs. See, e.g., Cameron v. Craig, 713 F.3d 1012, 1018 (9th Cir. 2013) (reiterating that the court must view summary judgment evidence in the light most favorable to the nonmoving party). Indeed, there is evidence of drivers being admonished (or terminated) by Uber for failing to comply with its “suggestions.” See, e.g., Docket No. 223-50 (informing driver that “a passenger let us know that your attitude wasn’t up to Uber’s professional standards,” and noting that “[i]f we continue to receive negative feedback ... your account will be reviewed and may be deactivated”); Docket No. 223-54 (terminating driver whose “overall driver rating has fallen below the minimum threshold we allow”); Docket No. 223-58 (informing driver that a “passenger let us know that they felt you did not take the most efficient/direct route on a trip” and noting that the driver’s account may be deactivated).
Nor can this Court at this juncture credit the argument that Uber has no ability to ensure that any driver actually complies with its “suggestions” or otherwise actively monitor its drivers’ performance. In fact, there is evidence suggesting that Uber monitors its drivers to ensure compliance
In arguing there is insufficient monitoring to warrant an inference of an employment relationship, Uber asks the Court to contrast the level of monitoring of Plaintiffs’ job performance here to that performed by management in Alexander. In Alexander, the Ninth Circuit found the fact that drivers were accompanied on ride-alongs by management representatives up to four times each year important to its determination that drivers were FedEx’s employees as a matter of law. Alexander, 765 F.3d at 985. During these ride-alongs, the drivers were scrutinized on minute details of their performance, such as “whether a driver uses a dolly or cart to move packages” or “places his or her keys on the pinky finger of his or her non-writing hand after locking the delivery vehicle.” Id. (internal quotation marks and modifications omitted).
Uber claims that the level of monitoring in Alexander is far more extensive than what its transportation providers are subjected to. Indeed, Uber notes that its admitted employees or members of management never conduct any performance, inspections or ride-alongs with its drivers. This is an argument for the jury. At this point it suffices to note that it is not immediately clear that Uber drivers are subject overall to less monitoring than the employees in Alexander. Indeed, viewing the evidence in the light most favorable to the Plaintiffs, it appears they are monitored more pervasively than the drivers in Alexander. The Alexander drivers were monitored just four times a year, and knew exactly when they were being inspected. Uber drivers, by contrast, are monitored by Uber customers (for Uber’s benefit, as Uber uses the customer rankings to make decisions regarding which drivers to fire) during each and every ride they give, and Uber’s application data can similarly be used to constantly monitor certain aspects of a driver’s behavior. This level of monitoring, where drivers are potentially observable at all times, arguably gives Uber a tremendous amount of control over the “manner and means” of its drivers’ performance. Cf. Michel Foucalt, Discipline and Punish: The Birth of the Prison 201
Finally, Uber makes much of the fact that Uber has no control over its drivers’ hours or whether its drivers even “report” for work more than once in the relevant period. This is a significant point, and one on which this Court previously commented in noting that such evidence might weigh heavily in favor of a finding of independent contractor status. However, as noted above, freedom to choose one’s days and hours of work (which concededly did not truly exist for FedEx drivers in Alexander
Because the Court concludes that a number of material facts relevant to the “primary” Borello analysis are in dispute, thus . precluding summary judgment, the Court need not examine in detail each of Borello’s numerous secondary factors. The Court nonetheless notes that a reasonable jury could find that numerous secondary factors cut in favor of finding an employment relationship. For instance, a jury could conclude that driving a car (as opposed to, e.g., a truck or bus) does not require a special skill, particularly if no special driver’s license is required. Compare JKH Enterprises, 142 Cal.App.4th at 1064, 48 Cal.Rptr.3d 563 (holding that “the functions performed by the drivers, pickup and delivery of packages and driving in between, did not require a high degree of skill”) with State Comp. Ins. Fund v. Brown, 32 Cal.App.4th 188, 202-203, 38 Cal.Rptr.2d 98 (1995) (noting that “truck driving — while perhaps not a skilled
To be sure, a number of secondary factors {e.g., drivers use their own vehicle, may employ other drivers to drive on their behalf,
As noted above, rarely does ■ any one factor dictate the determination of whether a relationship is one of employment or independent contract. Here, numerous factors point in opposing directions. As to many, there are disputed facts, including those pertaining to Uber’s level of control over the “manner and means” of Plaintiffs’ performance. Viewing the current record in the light most favorable to Plaintiffs, the Court cannot conclude as a matter of law that Plaintiffs are Uber’s independent contractors rather than their employees. Consequently, Uber’s summary judgment motion must be denied.
III. CONCLUSION
The application of the traditional test of employment — a test which evolved under an economic model very different from the new “sharing economy” — to Uber’s business model creates significant challenges. Arguably, many of the factors in that test appear outmoded in this context. Other factors, which might arguably be reflective of the current economic realities (such as the proportion of revenues generated and shared by the respective parties, their relative bargaining power, and the range of alternatives available to each), are not expressly encompassed by the Borello test. It may be that the legislature or appellate courts may eventually refine or revise that test in the context of the new economy. It is conceivable that the legislature would enact rules particular to the new so-called “sharing economy.” Until then, this Court is tasked with applying the traditional mul-tifactor test of Borello and its progeny to the facts at hand. For the reasons stated above, apart from the preliminary finding that Uber drivers are presumptive employees, the Borello test does not yield an unambiguous result. The matter cannot on this record be decided as a matter of law. Uber’s motion for summary judgment is therefore denied.
This order disposes of Docket No. 211.
IT IS SO ORDERED.
. O'Connor’s account with Uber was terminated in 2014, but the other named Plaintiffs still have active accounts with Uber. See Docket No. 211 at 5 n.7.
.If a potential driver fails the city knowledge test, they "will not be able to interview until they get more familiar with the city.” Docket No. 223-29 at 4. At least one version of the "SF Ci1y Knowledge Test” contains forty questions, such as: "When driving on Sunset Blvd, how are the cross streets generally named,” and “True or False: The Museum of Modern Art (MOMA) and the Palace of Fine Arts are two names for the same place.” Docket No. 238-6.
. The Raiser Service Agreement is signed by drivers on the uberX platform. The Uber Addendum is signed by drivers on the Uber-Black platform.
. Uber never materially distinguishes between itself and Raiser or argues that Raiser’s separate corporate status is relevant to this litigation. Uber further admits Raiser is its subsidiary. Colman Decl. at ¶ 7. Consequently, the Court treats Raiser as equivalent to Uber for the purpose of this motion, and refers to these entities collectively as "Uber.”
. The Court observes that Uber owns a U.S. trademark on "Everyone's Private Driver.” U.S. Trademark No. 85,816,634.
. Uber objects to the Court considering the Onboarding Script (and a number of Plaintiffs’ other exhibits) on the ground that Plaintiffs did not properly lay a foundation for these documents. See Uber Reply Br. at 5 n. 7.Specifically, Uber objects that the Plaintiffs have not established that any Plaintiff was actually exposed to the information contained in the Onboarding Script or other contested documents such as an Uber Handbook. But the relevant legal question on summary judgment is whether the challenged evidence “could be presented in an admissible form at trial.” Fraser v. Goodale, 342 F.3d 1032, 1037 (9th Cir. 2003) (emphasis added). See Fed. R. Civ. P. 56(c)(2) (party may object to facts that "cannot be presented in a form that would be admissible in evidence”). If so, the Court may consider such evidence on summary judgment. Id. It is only where the evidence could never be presented in admissible form that such evidence should be excised from the summary judgment record. See Fed. R. Civ. P. 56(c)(2); see also Hughes v. United States, 953 F.2d 531, 543 (9th Cir. 1992) (noting that an affidavit containing hearsay and subject to best evidence rule objections could still be considered on summary judgment because the facts underlying the affidavit are of the type that would be admissible at trial even though the affidavit itself might not be admissible). The Court further notes that at the hearing, Uber’s counsel acknowledged that Uber does not dispute the authenticity of a number of the contested exhibits and acknowledged that much of this evidence was produced by Uber and/or is printed on Uber’s letterhead. See Oral Arg. Hearing Tr. at 90:22-94:20.
. The same blog post notes that Uber first went by the name "UberCab,” but later changed the name simply to "Uber” after the City of San Francisco sent a cease-and-desist letter "saying amongst other things, that our name UberCab means we are marketing ourselves as a cab company.” Id. at 3.
. The Supreme Court noted that the "worker’s corresponding right to leave is similarly relevant: 'An employee may quit, but an independent contractor is legally obligated to complete his contract.’ ” Ayala, 59 Cal.4th at 531 n. 2, 173 Cal.Rptr.3d 332, 327 P.3d 165 (quoting Perguica v. Indus. Accident Comm’n, 29 Cal.2d 857, 179 P.2d 812 (1947)).
. The fact that Uber’s Terms of Service apparently disclaim any actual obligation to provide its passengers with transportation services would likely come as a surprise to those numerous riders who successfully use Uber to obtain such services. In any event, Uber has presented no evidence that it actually fails to pair its riders with a driver on a regular basis, or that drivers pay it for leads even when those leads do not result in actual rides. At least on this last point, the evidence is clearly the opposite: Uber is only paid when a “lead” results in a completed ride.
. Indeed, Uber's own documents show that it characterizes itself as a transportation company, transportation network, or on-demand car service. See, e.g., Docket No. 223-1 at 6; Docket No. 223-29 at 2. The Court further notes with interest that the California Public Utilities Commission has classified Uber as a '"transportation network company.” See Docket No. 223-11.
. While Uber’s lawyers refuse to admit this fact, at least one Uber General Manager appears to have recognized as much in an Uber training video presented to its drivers: "It’s pretty clear to all of us [at Uber] that without what you guys do every week and every day we wouldn’t have a company. We are not out there. You guys are out there and you guys are the best at what you do." Docket No. 223-14.
. See also Docket No. 238-1 (email to Uber driver permanently terminating her account for allowing others to drive under her user name, a behavior Uber described as "not an acceptable practice, as all of our drivers must go through the application process for safety reasons”).
. At oral argument, counsel for Uber asked the Court to consider a number of analogies and hypotheticals he claimed demonstrate that Uber receives no service from its drivers. For example, Uber’s counsel likened Uber to a recruiter that serves as an intermediary between potential job seekers and potential employers. Oral Arg. Tr. at 44:19-47:8. According to Uber, such a recruiter does not receive a service from either the candidates or the employers, despite the fact that the recruiter only gets paid if she successfully places a candidate. This analogy is inapt. Uber not only unilaterally qualifies and selects its drivers, it maintains an ongoing relationship and exercises supervision over their performance. Uber's success depends upon the quality of its drivers’ ongoing performance. In contrast, recruiters engage in a onetime transaction and do not supervise the clients it places; nor does the recruiter’s income depend on the ongoing performance of those clients.
. Uber also cites to a decision rendered by a California Labor Commission Hearing Officer finding that an Uber driver was not an employee of Uber because Uber's "business was engaged in technology and not in the transportation industry,'' and thus the "services Plaintiff provided were not part of the business operated by the Defendant.” Docket No. 213-7 at 5. Uber cites no case law suggesting this Court owes the Hearing Officer's conclusion any deference, and his conclusion appears to warrant none. On the merits, the decision (which contains only one paragraph of analysis) is plainly wrong. One cannot necessarily blame the Hearing Officer for reaching the wrong conclusion, however: while Uber was represented at the hearing, Plaintiff appeared pro se. Id.
. Uber ironically argues in one breath that Uber is sufficiently analogous to a government regulator to come under the holding of Callahan, while in another breath argues that Uber exercises so little control over its drivers that no reasonable jury could find that they are Uber's employees.
. The Court holds below that the ultimate question of whether a hiree should be classified as an employee or independent contractor is one that must typically be decided by a jury. The Court need not definitively decide whether the threshold question of whether a hiree performs a service for her putative employer is similarly a question typically reserved for jury resolution (as opposed to resolution by the Court as a legal matter) because in this case the Court holds that no reasonable juror could conclude that Uber does not receive service from the Plaintiffs. See Alexander, 765 F.3d at 988 (summary adjudication is appropriate where the jury could return only one possible verdict).
. See further Brose v. Union-Tribune Publ'g Co., 183 Cal.App.3d 1079, 1082, 228 Cal.Rptr. 620 (1986) ("Whether a person is an employee or an independent contractor is ordinarily a question of fact but if from all the facts only one inference may be drawn it is a question of law.”); Hillen, 199 Cal. at 580, 250 P. 570 ("Whether or not the relation of employer and employee existed in this case, under the oral
. The Court further notes that the holdings of the California Supreme Court in Burling-ham and Borello are also clear and consistent with the Ninth Circuit’s determination in Na-rayan — employee/independent contractor status may only be resolved by the court where the evidence and all inferences from the evidence (including the ultimate inference as to the nature of the relationship) are undisputed. Hence, the ultimate determination of employment status should typically be made by juries, not judges.
. The issue of Uber’s right to terminate its drivers may not truly be in dispute. The contracts say what they say, and this Court may interpret unambiguous contractual terms as a matter of law. See Alexander, 765 F.3d at 988 (granting summary judgment in favor of FedEx drivers based in large part on Court's legal interpretation of the relevant contracts). Assuming the Court reads the contracts to mean what they say — that Plaintiffs are terminable at will — then this factor would tip in favor of finding Plaintiffs are Uber’s employees.
. See Alexander, 765 F.3d at 985 (in practice drivers had to report to the FedEx Center at the beginning of the day and at the end of the shift.).
. Thus, for instance, a day laborer or any other temporary or casual worker may choose when to make him or herself available for work: but if once hired, the means and manner of performance is substantially controlled by the hirer, an employment relationship may be found. See, e.g., Borello, 48 Cal.3d at 345-46, 256 Cal.Rptr. 543, 769 P.2d 399 (holding that temporary "sharefarmers” were employees entitled to workers’ compensation coverage).
. Drivers are allowed to hire "subcontractors” or "agents” to actually drive Uber passengers for their benefit, so long as those subcontractors or agents meet the same quality standards Uber imposes on the actual contracting party. See Service Agreement at 3, 6.
Reference
- Full Case Name
- Douglas O'CONNOR v. UBER TECHNOLOGIES, INC.
- Cited By
- 23 cases
- Status
- Published