PRICE v. UBER TECHNOLOGIES, INC. et al

Filing 52

ORDER granting in part and denying in part Defenant's 35 Motion to Compel Arbitration. The motion to compel individual arbitration is granted and this matter is stayed as to Anih only pending resolution of the arbitration proceeding. The m otion to dismiss is denied, as the Seventh Circuit has held repeatedly, "the proper course of action when a party seeks to invoke an arbitration clause is to stay the proceedings rather than to dismiss outright." Halim v. Great Gatsby 9;s Auction Gallery, Inc., 516 F.3d 557, 561 (7th Cir. 2008). The parties are directed to notify the Court within 14 days of the issuance of any arbitration award or other action that terminates the arbitration proceedings. (S.O.). Signed by Magistrate Judge Mark J. Dinsmore on 6/1/2017. (MAC)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

CLINTON PRICE,
Ogbonna Anih,

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Plaintiffs,
vs.
UBER TECHNOLOGIES, INC.,
RASIER, LLC,
Defendants.

No. 1:17-cv-00706-SEB-MJD

ORDER ON MOTION TO COMPEL ARBITRATION
This matter is before the Court on Defendants’ Motion to Compel Putative Opt-In
Plaintiff Ogbonna Anih to Arbitration and Dismiss Him From This Action. [Dkt. 35.] The Court
GRANTS IN PART and DENIES IN PART Defendants’ Motion. For the reasons set forth
below, this action is stayed as to Plaintiff Anih’s claims only, pending arbitration. 1
I.

Background Facts

Opt-in Plaintiff, Ogbonna Anih, is an Indiana resident who worked as an Uber driver. At
the heart of this case is Plaintiffs’ contention that Uber misclassifies its drivers as independent
contractors rather than employees resulting in the violation of wage payment laws. Plaintiff Price
brought this FLSA action on behalf of himself and all other similarly situated persons working as
drivers in this district for Defendant Uber Technologies, Inc.
Uber Technologies is a technology company that offers a smartphone application to
connect riders looking for transportation to drivers. Defendant Rasier LLC is a wholly owned

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This Order is limited to the claims of putative opt-in Plaintiff Ogbonna Anih. Defendants do not seek to compel
Plaintiff Clinton Price to arbitration because he opted out of the Arbitration Provision.

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subsidiary of Uber Technologies (Defendants hereinafter collectively referred to as “Uber”).
Customers use their smartphones to request rides through the Uber app. The request is routed to
the locally-available Uber drivers, who use their own vehicles to pick-up and transport
customers. The customer pays through the Uber app and the driver is paid directly by Uber for a
portion of the fare collected from the customer.
Prior to using Uber’s software to generate leads for riders, potential drivers must enter
into the Technology Services Agreement (the “Agreement”). 2 To enter the Agreement, Anih had
to sign into the Uber app and click the appropriate hyperlink. The Agreement is then presented
on the screen and can be reviewed in its entirety by scrolling. There is no time limitation to
review the Agreement. To advance past the “Agreement” screen, the driver must first click
“YES, I AGREE” and then click “CONFIRM.” After confirming his acceptance of the
Agreement, it is automatically transmitted to Plaintiff’s personal Driver Portal, where he could
review it or print it at any time.
The Agreement contains an Arbitration Provision, which provides, in relevant part:
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
individual basis only and not by way of court or jury trial, or by way of class,
collective, or representative action.
Except as provided in Section 15.3(v) below, regarding the Class Action Waiver,
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

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Uber periodically revises its agreements and its drivers must assent to those revised versions to receive continued
access to the app. The Agreement cited here is the most recent Agreement between the parties.

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of the Arbitration Provision. All such matters shall be decided by an Arbitrator
and not by a court or judge.
[Dkt. 27-1 at 18 (emphasis in original).] 3
Once a driver accepts the Agreement, he may still opt out of the Arbitration
Provision. The Agreement provides:
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, either by (1) sending, within 30
days of the date this Agreement is executed by you, electronic mail to
[e-mail], stating your name and intent to opt out of the Arbitration
Provision or (2) by sending a letter by U.S. Mail, or by any nationally recognized
delivery service (e.g. UPS, Federal Express, etc.) or by hand delivery . . .
[Dkt. 27-1 at 22.]
Anih did not opt out of the Arbitration Provision. Uber now moves to compel the
arbitration of Anih’s claims. 4
II.

Discussion

Plaintiff does not dispute that he accepted the Agreement and did not opt out of the
Arbitration Provision. Rather, he argues that the class action waiver included in the Arbitration
Provision violates the National Labor Relations Act (“NLRA”) and therefore renders the
Arbitration Provision unenforceable. The December 2015 Agreement, unlike prior versions of
the Agreement, contains a “carve out” from the delegation clause for disputes regarding the class
action waiver. These disputes must be resolved by a court, not an arbitrator. [Dkt. 27-1 at 20.]

3 Although the Arbitration Provision begins on page 14 of the Agreement, potential drivers are advised of the
Provision and their ability to opt-out at the bottom of page one in a paragraph printed in bold-faced, ALL CAPS.
4 Similar cases between Uber and its drivers have been filed in numerous courts across the country. Significantly,
every federal district court with the exception of one in the Northern District of California has granted Defendants’
motions to compel arbitration for plaintiffs who did not opt-out of the Arbitration Provision. That rogue California
district court decision recently was reversed by the Ninth Circuit in Mohamed v. Uber Technologies, Inc., 2016 WL
4651409 (9th Cir. 2016).

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Therefore, the validity of the class action waiver is properly before this Court and Anih’s
arguments will be addressed in turn below.
A. Lewis v. Epic Systems
Anih asserts the Arbitration Provision is unenforceable because it contains a class action
waiver that violates Sections 7 and 8 of the National Labor Relations Act. In support of this
proposition, Anih relies upon Lewis v. Epic Systems, wherein the Seventh Circuit held that a
class action waiver rendered a similar arbitration provision unenforceable because it interfered
with employees’ Section 7 right to engage in concerted activity. 823 F.3d 1147 (7th Cir. 2016),
cert. granted, 137 S. Ct. 809 (2017).
In Lewis, the employer sent to its employees via email an arbitration agreement
mandating that wage and hour claims could only be brought through individual arbitration and
that employees waived the right to collective action for such claims. Employees were deemed to
have accepted the agreement if they continued working. In other words, unlike Anih, employees
in Lewis had no option to decline or “opt-out” of the agreement if they wanted to keep their jobs.
Lewis, 823 F.3d at 1151. The Seventh Circuit expressly declined in Lewis to decide the effect of
an opt-out clause, such as the one in this case, on the enforceability of a class action waiver. The
Court stated, “We have no need to resolve these differences today, however, because in our case,
it is undisputed that assent to Epic’s arbitration provision was a condition of continued
employment. A contract that limits Section 7 rights that is agreed to as a condition of continued
employment qualifies as ‘interfer[ing] with’ or ‘restrain[ing] . . . employees in the exercise’ of
those rights.” Id. at 1155.
In this case, the Arbitration Provision was not a condition of continued employment.
Anih was able to opt-out of the entire Arbitration Provision – including the class action waiver –

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even after he began driving for Uber. At any time within the first 30 days of accepting the
Agreement, Anih could have sent an email opting out of the Arbitration Provision, thereby
preserving his right to pursue a collective action, as Plaintiff Price did. But Anih did not do so.
Instead, Anih clings to dicta from Lewis in which, Anih contends, the Seventh Circuit
suggests it would also invalidate an agreement with an opt-out provision. [Dkt. 44 at 8.] The
court noted:
We are aware that the circuits have some differences of opinion in this area,
although those differences do not affect our analysis here. The Ninth Circuit has
held that an arbitration agreement mandating individual arbitration may be
enforceable where the employee had the right to opt out of the agreement without
penalty, reasoning that the employer therefore did not “interfere with, restrain, or
coerce” her in violation of Section 8. Johnmohammadi v. Bloomingdale's, Inc.,
755 F.3d 1072, 1077 (9th Cir. 2014). The Ninth Circuit's decision in
Johnmohammadi conflicts with a much earlier decision from this court, which
held that contracts between employers and individual employees that stipulate
away Section 7 rights necessarily interfere with employees' exercise of those
rights in violation of Section 8. See NLRB v. Stone, 125 F.2d 752, 756 (7th Cir.
1942). Stone, which has never been undermined, held that where the “employee
was obligated to bargain individually,” an arbitration agreement limiting Section
7 rights was a per se violation of the NLRA and could not “be legalized by
showing the contract was entered into without coercion.” Id.
Lewis, 823 F.3d at 1155. Anih asserts that based on “the Seventh Circuit’s clear distaste for
Johnmohammadi, the Magistrate Judge should not adopt that position.” [Dkt. 44 at 9.]
While whether the above language shows a “clear distaste” for the Ninth Circuit’s
decision that an arbitration agreement with an opt-out clause is permissible under the NLRA is
debatable, what is clear is that Anih really wants Lewis to say something it simply does not say.
Anih seeks a ruling from the Court based upon his interpretation of dicta from a case that will be
reviewed by the Supreme Court next term and contains a key factual distinction in the lack of an
opt-out clause. It is possible that the Supreme Court’s future ruling in Lewis will alter the

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landscape of the Uber cases nationwide. 5 For now, however, as the Seventh Circuit expressly
declined to address the effect of a clear opt-out provision on the validity of a class action waiver,
the Court finds the optional waiver in this case to be lawful. Anih had the opportunity to choose
to resolve disputes by arbitration or litigation. By not acting upon the clear, bold-faced language
in the Arbitration Provision and simply sending an opt-out email or letter within 30 days, Anih is
now bound to arbitrate his claims.
B. On Assignment Staffing
Anih next argues the Court should defer to the NLRB’s decision in On Assignment
Staffing, wherein the Board found a voluntary class waiver violated the NLRA. 2015 WL
5113231. rev'd per curiam, On Assignment Staffing Servs., Inc. v. NLRB, No. 15-60642, 2016
WL 3685206 (5th Cir. June 6, 2016). While Anih notes that three district courts (none from
within the Seventh Circuit) have deferred to the NLRB’s opinion on this issue, the Court also
notes that On Assignment Staffing was summarily reversed by the Fifth Circuit. Given that the
Seventh Circuit expressly declined to resolve the issue of the opt-out provision in Lewis without
referencing On Assignment Staffing, the Court declines to defer to that reversed Board decision
here.
III.

Conclusion

Based on the foregoing, Defendant’s Motion to Compel Putative Opt-In Plaintiff
Ogbonna Anih to Arbitration and Dismiss Him From This Action [Dkt. 35] is GRANTED IN
PART and DENIED IN PART. The motion to compel individual arbitration is granted and this

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On January 13, 2017, the Supreme Court granted certiorari in three circuit court cases on the issue whether despite
the NLRA, arbitration agreements requiring employees to waive their rights to pursue class or collective action
employment-related claims against their employers are enforceable pursuant to the FAA. See Lewis, 823 F.3d 1147;
Ernst & Young v. Morris, Stephen, 2016 U.S. App. LEXIS 15638 (9th Cir. 2016); NLRB v. Murphy Oil USA Inc.,
808 F.3d 1013 (5th Cir. 2015).

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matter is stayed as to Anih only pending resolution of the arbitration proceeding. The motion to
dismiss is denied, as the Seventh Circuit has held repeatedly, “the proper course of action when a
party seeks to invoke an arbitration clause is to stay the proceedings rather than to dismiss
outright.” Halim v. Great Gatsby's Auction Gallery, Inc., 516 F.3d 557, 561 (7th Cir. 2008).
The parties are directed to notify the Court within 14 days of the issuance of any
arbitration award or other action that terminates the arbitration proceedings.

Dated: 1 JUN 2017

Distribution:
Service will be made electronically
on all ECF-registered counsel of record
via email generated by the Court’s ECF system.

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