Ninth Circuit Rules on Class-Action Status in Microsoft, Uber Lawsuits

Ninth Circuit Rules on Class-Action Status in Microsoft, Uber Lawsuits

In the past week, the US Court of Appeals for the Ninth Circuit issued two decisions on the class-action status of lawsuits against two major tech companies, denying class-action status to Uber employees seeking a ruling on their employment classification but saying it would hear arguments for a class action against Microsoft in a lawsuit alleging gender discrimination. In the Microsoft case, the Seattle Times reported last Monday, the court said it would hear an appeal of a lower court’s decision denying class-action status:

The plaintiffs in the lawsuit are seeking to add to the case more than 8,600 women who have worked in engineering jobs at the company, making it a class-action suit. U.S. District Judge James Robart denied the class-action motion in June, saying there were not strong enough similarities between the women’s claims to prove companywide bias practices.

The case, Moussouris v. Microsoft, is one of a few high-profile gender-discrimination lawsuits against big tech companies weaving its way through the courts. It has been going on for three years and alleges gender discrimination across Microsoft, particularly tied to the way performance reviews and promotions were conducted. Microsoft has denied the claims, saying its processes do not discriminate against women. Lawyers for the plaintiffs appealed Robart’s ruling this summer that blocked class-action status.

The case against Microsoft was first filed by three female employees in 2015, alleging that the company’s pay and promotion processes systematically discriminated against women in technical and engineering roles. Documents unsealed in the lawsuit last November also suggested the tech company failed to respond appropriately to reports of sexual harassment and assault. The appeals court is expected to hear oral arguments in this case next year.

Meanwhile, on Tuesday, a three-judge panel at the Ninth Circuit ruled in favor of Uber in a lawsuit concerning whether drivers using the ride-sharing app should be classified as employees or independent contractors. According to the Verge, the court determined that Uber’s arbitration clause prohibits drivers from engaging in class actions, so it had no choice but to reverse a lower court’s class certification order:

“We have, unfortunately, been long expecting this,” said Shannon Liss-Riordan, an attorney representing Uber drivers in O’Connor. She cited the Ninth Circuit’s previous ruling against Uber drivers, and the US Supreme Court’s decision in Lewis v. Epic Systems earlier this year, in building up to this decision. “Those two previous rulings,” she said in an email, “removed one of our remaining arguments for why Uber should not be able to use its arbitration clause to avoid certification of a class for its widespread labor violations.”

The Ninth Circuit ruling impacts a consolidated appeal of 11 pending cases that essentially boil down to the same issue: should drivers be considered employees? If so, can they sue as part of a class-action lawsuit? With today’s ruling in favor of Uber, drivers will be considered contractors — and they won’t, as is currently the case, receive numerous benefits. “We are pleased with the Court’s decision,” a spokesperson said.

The controversial, 5–4 Supreme Court ruling in Epic Systems, which was handed down in May, gave a green light to organizations to require their employees to sign arbitration agreements in their work contracts and waive their right to resolve labor disputes through class-action lawsuits. Labor rights advocates decried the decision as a serious erosion of workers’ powers to fight back against abusive employers.

Arbitration clauses are particularly controversial in sexual harassment and discrimination claims, where they are seen by critics as a means of silencing victims and covering up serious problems in an organization’s culture. Shortly before the Supreme Court issued its ruling, Uber and its chief competitor Lyft both announced that they would no longer require employees, drivers, or customers who experience sexual harassment on the job or while using the ride-sharing service to adjudicate their claims in arbitration.

The future of the classification lawsuit is uncertain now that it has lost its class action certification. Liss-Riordan told the Verge that she was considering appealing the panel’s decision to the full court (an en banc rehearing).

This post is published for informational purposes only and does not constitute legal advice or an opinion on the legal matters discussed within. Employers should consult their general counsel whenever they have questions pertaining to laws, regulations, or potential liabilities.