Johnston, et al. v. Uber Tech., Inc. (N.D. Cal.)

Uber is a nationwide car service that provides software to connect drivers and riders. It is the largest such ride-hailing platform and operates in most major cities around the world. Uber became a publicly traded company in May 2019 with a valuation of $75.5 billion.

Uber began connecting drivers and riders in Austin, Texas in 2014, but that came to a temporary end in 2016 when Austin voters rejected a proposition that would have allowed Uber (and other ride hailing companies) to bypass city rules requiring drivers with ride-hailing services to clear fingerprint-based criminal background checks. Within two days of this election, Uber abruptly withdrew their company from Austin, and thousands of Austin Uber drivers lost their incomes overnight.

Most corporations who employ large numbers of people are required to comply with federal regulations in the event that they must close down or shutter their businesses. The Worker Adjustment and Retraining Notification (WARN) Act is a federal requirement that businesses who employ more than one hundred workers have the right to a period of warning in the event of a closing or mass layoff. Workers are owed a period of sixty days to help them transition into new jobs. In the event that a business does not provide such warning, the affected employees are entitled to up to sixty days back pay.

As a result of the rapid withdrawal from the Austin market, Todd Johnston filed suit for Uber’s failure to warn drivers that the company would be ceasing operations – a violation of the WARN Act. At the heart of this suit and many others Uber is litigating is whether drivers should be considered employees or independent contractors. While this issue has recently been addressed largely to Uber’s favor by the U.S. Circuit Court, the issue of whether acts such as the WARN act should apply to employers like Uber are still under discussion. John Davis is counsel on behalf of Plaintiff Todd Johnston in this case that has the possibility to affect many “gig-economy” business models. The case is currently pending in the United States District Court for the Northern District of California.

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