A California state judge has ruled that Uber’s arbitration clause is unenforceable, declaring it inconsistent because it says in one provision that a private arbitrator decides whether a dispute should be resolved in arbitration and in another that the choice is to be made by a judge.
While the ruling isn’t binding on other state judges, it will guide them in similar cases against Uber, said Jim Evans, partner in Alston & Bird’s Labor and Employment Group, who drafts arbitration agreements for companies and helps enforce them.
“It’s persuasive authority that other drivers will be able to rely on in urging other courts to find that Uber’s arbitration agreement should not be enforced,” said Evans.
An appeal will take 18 months to two years, and “the passage of time is helpful to Uber,” Evans added. U.S. Supreme Court decisions that generally support the enforcement of arbitration agreements are at odds with some California decisions that have produced a “mixed bag” of results, he said.