Employers Win: Ninth Circuit Agrees That An Arbitrator Should Decide if Uber’s Arbitration Agreement is Enforceable

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04/25/2017

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Employers Win: Ninth Circuit Agrees That An Arbitrator Should Decide If Uber’s Arbitration Agreement Is Enforceable

By: Rebecca Hause-Schultz

While it seems employers have been on the losing end of most recent decisions, in Mohamed v. Uber employers scored a victory when the Ninth Circuit upheld an arbitration agreement provision that delegated the authority to an arbitrator to decide whether the arbitration agreement was enforceable instead of the court, particularly where the agreement included the option for employees to “opt out” of arbitration. Thus, it was improper for the lower court to hold that Uber’s arbitration agreement was unenforceable because the arbitration agreement granted that decision to an arbitrator instead of the Court.

In this case, the Court held that Uber’s arbitration agreements gave authority to an arbitrator to determine whether its arbitration provisions were enforceable. The court further reasoned that the provision was not unfair to employees, because it provided an opportunity for employees to opt out. While Plaintiffs argued that the opt out provision was buried in the contract and required employees to adhere to a specific opt out procedure, the court held that because the employees signed the contract, they could not complain that they were unfamiliar with it and were bound by the contract’s terms. 

COUNSEL TO MANAGEMENT:

This case finally marks a win for employers, and further clarifies that arbitration agreements that delegate important duties, like determining the enforceability of the agreement, to arbitrators are enforceable particularly when they give employees the ability to opt-out. If you have questions about how the Uber case, or other recent decisions, impact your arbitration agreement, or you would like to roll-out an arbitration agreement at your Company, contact the Saqui Law Group.


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