Suarez et al vs. Uber Technologies, Inc.
ORDER: Defendant's Motion to Compel Arbitration and Strike Class/Collective Allegations 7 is GRANTED. This action is dismissed without prejudice so that Plaintiffs may, on an individual basis, submit their claims to arbitration. The Clerk of Court is directed to close this case and terminate any pending motions as moot. Signed by Judge James S. Moody, Jr on 5/4/2016. (LN)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ANTONIO SUAREZ, individually and on
behalf of others similarly situated,
CASE NO: 8:16-cv-166-T-30MAP
UBER TECHNOLOGIES, INC.,
THIS CAUSE comes before the Court upon Defendant’s Motion to Compel
Arbitration and Strike Class/Collective Allegations (Dkt. #7), Plaintiffs’ Response in
Opposition (Dkt. #19), and Defendant’s Reply Memorandum (Dkt. #30). The Court, having
reviewed the motion, response, reply, and being otherwise advised in the premises, concludes
that the motion should be granted.
Plaintiffs, who were drivers for Defendant Uber Technologies, Inc. during the relevant
time, allege that Uber misclassified them and other drivers as independent contractors, rather
than as employees. As a result, Plaintiffs assert the following claims under the Fair Labor
Standards Act (“FLSA”): they were not paid for all of the hours they actually worked; they
were not paid at least the Federal minimum wage for each hour worked; and they were not
paid overtime compensation for hours they worked in excess of forty hours in one week.
Plaintiffs also bring claims under the Internal Revenue Code (“IRC”) and the Florida
Deceptive and Unfair Trade Practices Act (“FDUTPA”) that incorporate the same allegations
of unpaid wages from the FLSA claims. Finally, Plaintiffs allege a collective action on their
FLSA claims and a class action on their FDUTPA and IRC claims.
Uber moves to compel arbitration and strike the class/collective allegations based on
arbitration agreements that each Plaintiff executed in connection with their employment.
Uber argues that the arbitration agreements are enforceable and cover the claims asserted in
this action. Uber also moves to strike the class/collective allegations because the arbitration
agreements state that the parties agree to resolve their disputes in arbitration on an individual
basis only. The relevant facts related to the arbitration agreements now follow.
Uber is a technology company that acts as a conduit between riders looking for
transportation and drivers looking for riders. Uber provides the technology, through its
smartphone application (the “Uber App”) that allows riders and drivers to connect based on
Each of the four named Plaintiffs signed up to use the Uber App to connect with
potential passengers using the “uberX” platform so that they could have the opportunity to
transport those passengers for a fare. In order to access the uberX platform to accept ride
requests from prospective passengers, Plaintiffs were first required to electronically accept
the applicable Software License and Online Services Agreement, dated November 10, 2014
(“Services Agreement”). When Plaintiffs logged on to the Uber App using their unique user
names and passwords, they had the opportunity to review the Services Agreement by clicking
a hyperlink within the Uber App. To advance past the screen with the hyperlink to the
Services Agreement, Plaintiffs had to confirm that they had first reviewed and accepted the
Services Agreement by clicking “YES, I AGREE.” After clicking “YES, I AGREE,” they
were prompted to confirm their review and acceptance of the Services Agreement a second
Plaintiffs were free to spend as much time as they wished reviewing the applicable
agreement on their smartphones or electronic devices. After confirming their acceptance a
second time through the Uber App, the Services Agreement was immediately sent to each
Plaintiff’s driver portal, where Plaintiffs could access the agreement to review at their leisure,
either online, or by printing a copy.
The Services Agreement contains an arbitration agreement (the “Arbitration
Provision”) that requires transportation providers, if they do not opt out, to arbitrate all
disputes (with certain exceptions not relevant here) arising out of or related to the agreement
or their relationship with Uber, including disputes alleging breach of contract, wage and hour
claims, unfair competition, or any other claims brought under similar state and federal
statutes. The Arbitration Provision, in relevant part, provides as follows:
IMPORTANT: This arbitration provision will require you to resolve any claim
that you may have against the Company or Uber on an individual basis
pursuant to the terms of the Agreement unless you choose to opt out of the
arbitration provision. This provision will preclude you from bringing any
class, collective, or representative action against the Company or Uber . . .
WHETHER TO AGREE TO ARBITRATION IS AN IMPORTANT
BUSINESS DECISION. IT IS YOUR DECISION TO MAKE, AND YOU
SHOULD NOT RELY SOLELY UPON THE INFORMATION
PROVIDED IN THIS AGREEMENT AS IT IS NOT INTENDED TO
CONTAIN A COMPLETE EXPLANATION OF THE
CONSEQUENCES OF ARBITRATION. YOU SHOULD TAKE
REASONABLE STEPS TO CONDUCT FURTHER RESEARCH AND
TO CONSULT WITH OTHERS . . .
This Arbitration Provision is governed by the Federal Arbitration Act,
9 U.S.C. § 1 et seq. (the “FAA”) and evidences a transaction involving
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 a forum other than
arbitration. This Arbitration Provision requires all such disputes
to be resolved only by an arbitrator through final and binding
arbitration on an individual basis only and not by way of court or
jury trial, or by way of class, collective, or representative action.
Such disputes include without limitation disputes arising out of or
relating to interpretation or application of this Arbitration Provision,
including the enforceability, revocability or validity of the Arbitration
Provision or any portion of the Arbitration Provision. All such matters
shall be decided by an Arbitrator and not by a court or judge.
Except as it otherwise provides, this Arbitration Provision also applies,
without limitation, to disputes arising out of or related to this
Agreement and disputes arising out of or related to your relationship
with the Company, including termination of the relationship.
(Colman Decl., Ex. C at 15-17 (bold in original)).
Notably, after twice confirming their review and acceptance of the Services
Agreement, Plaintiffs were provided an additional thirty days to opt out of the Arbitration
Provision, which could be accomplished by simply sending an email to “email@example.com”
Your Right To Opt Out Of Arbitration.
Arbitration is not a mandatory condition of your contractual relationship
with the Company. If you do not want to be subject to this Arbitration
Provision, you may opt out of this Arbitration Provision by notifying the
Company in writing of your desire to opt out of this Arbitration Provision.
. . . Should you not opt out of this Arbitration Provision within the 30-day
period, you and the Company shall be bound by the terms of this
Arbitration Provision. You have the right to consult with counsel of your
choice concerning this Arbitration Provision. You understand that you
will not be subject to retaliation if you exercise your right to assert claims
or opt-out of coverage under this Arbitration Provision.
(Colman Decl., ¶ 11 & Ex. C).
The Services Agreement also contains cautionary notices, both at the beginning of the
agreement and before the Arbitration Provision, that advise Plaintiffs of the ramifications of
agreeing to arbitration and of choosing not to opt out, as well as of certain pending litigation
Each named Plaintiff in this action accepted the Services Agreement. Numerous Uber
drivers have elected to opt out of the Arbitration Provision. Plaintiffs did not elect to opt out
of the Arbitration Provision. The Court now turns to the relevant law regarding the
enforceability of the Arbitration Provision.
The Federal Arbitration Act (“FAA”) provides that a written arbitration agreement in
any contract involving commerce “shall be valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2.
“The FAA places arbitration agreements on equal footing with all other contracts and sets
forth a clear presumption—“a national policy”—in favor of arbitration.” Parnell v.
CashCall, Inc., 804 F.3d 1142, 1146 (11th Cir. 2015) (citing Buckeye Check Cashing, Inc.
v. Cardegna, 546 U.S. 440, 443 (2006); accord AT & T Mobility LLC v. Concepcion, 563
U.S. 333, 337-39 (2011); Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 72 (2010);
Inetianbor v. CashCall, Inc., 768 F.3d 1346, 1349 (11th Cir. 2014)).
“Importantly, parties may agree to commit even threshold determinations to an
arbitrator, such as whether an arbitration agreement is enforceable. The Supreme Court has
upheld these so-called ‘delegation provisions’ as valid, Rent-A-Center, 561 U.S. at 68-70,
and explained that they are severable from the underlying agreement to arbitrate, Buckeye,
546 U.S. at 445.” Parnell, 804 F.3d at 1146-47. If a plaintiff raises a challenge to the
contract as a whole and the arbitration agreement contains a delegation provision, the district
court may not review his claim because it has been committed to the power of the arbitrator.
Under these circumstances, the plaintiff must “challenge[ ] the delegation provision
specifically.” Rent-A-Center, 561 U.S. at 72 (emphasis added). The district court must treat
the delegation provision as valid and must enforce it unless the plaintiff challenges the
delegation provision itself. Id.
Notably, the same presumption of arbitrability does not apply to agreements
delegating authority over gateway issues. See Parnell, 804 F.3d at 1146-47. “Courts should
not assume that the parties agreed to arbitrate arbitrability unless there is clear and
unmistakable evidence that they did so.” Id. (citations omitted).
Plaintiffs do not dispute that a valid contract was formed when they assented to the
Services Agreement; they also do not dispute the fact that they did not opt out of the
Arbitration Provision. The crux of Plaintiffs’ opposition is that the Arbitration Provision is
unconscionable as a whole. Defendant argues that, through the Delegation Clause, the
parties clearly and unmistakably agreed to arbitrate questions of arbitrability, which would
include the issue of whether the Arbitration Provision is unconscionable. The Court first
turns to this threshold issue.
Clear and Unmistakable Intent
The Delegation Clause at issue here provides that “disputes arising out of or relating
to interpretation or application of this Arbitration Provision, including the enforceability,
revocability or validity of the Arbitration Provision or any portion of the Arbitration
Provision . . . shall be decided by an Arbitrator and not by a court or judge.” Notably,
Plaintiffs do not directly challenge the validity of the delegation provision. As such,
Defendant’s motion should be granted on this basis alone and adjudication of Plaintiffs’
attacks on the Arbitration Provision should be left to the arbitrator because it is clear and
unmistakable that the parties agreed to arbitrate arbitrability. See Sena v. Uber Technologies
Inc., No. CV-15-02418-PHX-DLR, 2016 WL 1376445, *3-*4 (D. Ariz. April 7, 2016)
(analyzing identical delegation clause and concluding that “[g]iven the plain language of the
Delegation Clause, the Court finds that the parties clearly and unmistakably intended to
arbitrate questions of arbitrability.”); see also Rent-A-Center, 561 U.S. at 68 (analyzing a
similar delegation clause and finding a clear and unmistakable delegation of threshold
questions to the arbitrator).
However, even if the Court were to analyze the validity of the Arbitration Provision
as a whole, Plaintiffs’ unconscionability arguments fail on the merits.
Choice of Law
As Defendant points out, two considerations require that Florida law applies to the
Court’s unconscionability analysis. First, in diversity cases, federal courts apply the forum
state’s choice of law rules. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496
(1941). Second, although Plaintiffs urge the Court to apply California law to the question
of unconscionability because the Services Agreement contains a California choice of law
provision, the Court must confine its analysis to the Arbitration Provision, which contains
no choice of law provision. See Nitro-Lift Techs., L.L.C. v. Howard, 133 S.Ct. 500, 503
(2012) (discussing the principle of severability); Sena, 2016 WL 1376445 at *4-*5
(analyzing nearly identical arbitration provision in a similar Uber case and holding that “the
Court must confine its analysis to the Arbitration Provision, which contains no choice of law
provision.”). Florida has the most significant relationship to this litigation given that Uber
does business in Florida, Plaintiffs live in Florida and worked as Uber drivers in Florida, and
the parties entered in the Services Agreement in Florida.
Florida courts recognize that the term “unconscionable” as it relates to contracts
generally means “shocking to the conscience,” “monstrously harsh,” or “to include an
absence of meaningful choice on the part of one of the parties together with contract terms
which are unreasonably favorable to the other party.” Gainesville Health Care Ctr., Inc. v.
Weston, 857 So. 2d 278, 283-84 (Fla. 1st DCA 2003) (internal citations and quotations
omitted). Under Florida law, “[b]efore a court may hold a contract unconscionable, it must
find that it is both procedurally and substantively unconscionable.” Id. (emphasis in
original); see also Golden v. Mobil Oil Corp., 882 F.2d 490, 493 (11th Cir. 1989). The test
for procedural unconscionability examines the manner in which the contract was entered, and
the court must determine whether the complaining party had a meaningful choice at the time
of the contract. See Fonte v. AT & T Wireless Servs., Inc., 903 So.2d 1019, 1025 (Fla. 4th
DCA 2005); Gainesville Health, 857 So. 2d at 284. The substantive component focuses on
the terms of the agreement itself in order to determine whether those terms are unreasonable
and unfair. See Powertel, Inc. v. Bexley, 743 So. 2d 570, 574 (Fla. 1st DCA 1999); Fonte,
903 So. 2d at 1025.
As explained above, procedural unconscionability addresses the fairness of the
bargaining process. As Defendant points out, there is no procedural unconscionability
because Plaintiffs had the absolute right to opt out of the Arbitration Provision. Notably, the
opt out clause appears prominently in the Arbitration Provision. Plaintiffs could opt out of
the Arbitration Provision within thirty days; the opt out mechanism was conspicuously
highlighted in the contract; opting out would not have any adverse effect on the other terms
of Plaintiffs’ contract; and numerous Uber drivers have exercised their right to opt out of the
Arbitration Provision. Even as the party with less bargaining power, Plaintiffs had the ability
to reject the Arbitration Provision without consequence to their relationship with Defendant.
Therefore, because Plaintiffs were not required to accept the Arbitration Provision, there can
be no finding of procedural unconscionability. See Sena, 2016 WL 1376445 at *5-*7
(concluding same under Arizona law).
Substantive unconscionability focuses on the fairness of the contract terms. Plaintiffs
argue that the Arbitration Provision’s fee-splitting clause renders the contract one-sided and
unfair. This provision states, in relevant part: “Unless the law requires otherwise, as
determined by the Arbitrator based upon the circumstances presented, you will be required
to split the cost of any arbitration with the Company.” There is also language further down
in the document under the category “Paying For the Arbitration” that states in relevant part:
“In all cases where required by law, the Company will pay the Arbitrator’s and arbitration
fees. If under applicable law the Company is not required to pay all of the Arbitrator’s
and/or arbitration fees, such fee(s) will be apportioned equally between the Parties . . .”
Notably, if Plaintiffs prevailed on their claims, they may be entitled to an award of their fees
under the FLSA and FDUTPA.
The Court concludes that Plaintiffs have not established the fee-splitting clause
renders the cost of arbitration prohibitively or unfairly expensive. Plaintiffs cannot establish
a likelihood of incurring excessive or unreasonable costs. Their arguments on this point are
entirely speculative. Indeed, Plaintiffs may incur no arbitration costs under a number of
scenarios, including if they prevail on their claims. Therefore, there can be no finding of
substantive unconscionability. See Sena, 2016 WL 1376445 at *7-*8 (concluding same
under Arizona law).
Finally, the law is clear that the waiver of class/collective claims cannot render the
Arbitration Provision unconscionable. See Pendergast v. Sprint Nextel Corp., 691 F.3d 1224,
1234 (11th Cir. 2012) (“We need not decide whether the class action waiver here is
unconscionable under Florida law or if it frustrates the remedial purposes of the FDUTPA,
because to the extent Florida law would invalidate the class action waiver, it would still be
preempted by the FAA.”).
The parties entered into valid and enforceable agreements to arbitrate questions of
arbitrability. The Court also concludes that the Arbitration Provision at issue here is not
unconscionable under Florida law. In light of the fact that the complaint was improperly
brought as a collective/class action, the Court exercises its discretion to dismiss this action
so that Plaintiffs may submit their claims to arbitration on an individual basis.
It is therefore ORDERED AND ADJUDGED that:
Defendant’s Motion to Compel Arbitration and Strike Class/Collective
Allegations (Dkt. #7) is GRANTED.
This action is dismissed without prejudice so that Plaintiffs may, on an
individual basis, submit their claims to arbitration.
The Clerk of Court is directed to close this case and terminate any pending
motions as moot.
DONE and ORDERED in Tampa, Florida on May 4, 2016.
Copies furnished to:
Counsel/Parties of Record
S:\Even\2016\16-cv-166 compel arb 7.wpd
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?