Anticouni & Ricotta | Leaders In Employment Litigation Serving Clients Throughout California.

Uber lawsuit in California could make wage enforcement harder

On Behalf of | Mar 10, 2023 | Wage And Hour Claims |

California’s Depart of Industrial Relations, which includes the Labor Commissioner’s office, is suffering from a major staffing problem, and the backlog of wage claims has climbed into the tens of thousands. Even though there’s a proposed budget that would allow the Labor Commission to hire new people, that won’t take effect (if approved) for another year.

Unfortunately, the “state of emergency” in the labor organization may get even more complicated if a lawsuit by Uber is successful.

What’s going on in the court system?

Under the Private Attorneys General Act, or PAGA, employees with a wage claim can bring claims on behalf of themselves, others in their situation and the State of California through private litigation. When successful, the Labor & Workforce Development Agency (LWDA) gets 75% of any penalties, while attorneys and plaintiffs get the rest.

This gives employees in this state more power to assert their rights when they’ve been denied fair compensation for their labor. Since they can collect civil penalties over a successful claim, it makes it possible for private attorneys to represent many employees at once without having to resort to (or be certified for) class-action status.

However, California’s Supreme Court is set to hear Adolph v. Uber Techs, Inc., which seeks to enforce Uber’s arbitration agreements with drivers who claim they were misclassified as independent contractors. The arbitration agreements would compel the drivers to bring mostly individual claims, making it harder to bring PAGA litigation forward.

Critics of the case say that if Uber succeeds with their claim, that would lead to much less autonomy among aggrieved workers. The entire PAGA process would hinge on whether or not a would-be litigant is required to submit to arbitration or not. This would ultimately decrease private enforcement of wage and hour claims and burden the state government more.

With this particular lawsuit heading to court very soon, it’s even more important for aggrieved workers who think they have a wage and hour claim to pursue timely action – because it may soon be much more difficult to get a fair settlement without going through new hoops.

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