On February 6, Uber filed a motion to compel individual arbitration of a class action lawsuit under the Fair Credit Reporting Act related to its alleged background check practices. If Uber is successful in compelling arbitration, it will provide another example of the value of arbitration agreements in the face of litigation.
In Mohamed v. Uber Technologies, Inc, the plaintiff sued Uber, among other defendants, in a class action lawsuit for alleged violations of the FCRA’s background check provisions. Specifically, the plaintiff claims that Uber violated the FCRA by allegedly ordering a background check without properly disclosing that it would procure a background check and without obtaining the plaintiff’s authorization for the background check. Further, the plaintiff also claims that once Uber obtained the background check, it violated the FCRA’s adverse action notice provisions.
In Uber’s February 6 filing, it requests the court to dismiss the plaintiff’s class action complaint and require the plaintiff to arbitrate the dispute on an individual basis. In other words, Uber argues that the plaintiff is prohibited under an arbitration agreement from pursuing his background check claims in court and that he is prohibited from arbitrating those claims on a class basis. The arbitration agreements in question, according to Uber, apply to disputes arising out of or related to the plaintiff’s relationship with Uber, including the termination of the relationship. These agreements further provide that arbitration can be brought “on an individual basis only” and not “on a ‘class … action basis.’”
Following Supreme Court guidance, federal courts have shown a proclivity in recent years toward enforcing valid arbitration provisions, including arbitration provisions precluding class-wide arbitration. Employers should consider utilizing arbitration provisions in connection with their employment processes.