Cavallo v. Uber Techs., Inc., Civ. Action No. 16-4264 (FLW)

CARLO CAVALLO, on behalf of himself and all those similarly-situated, Plaintiff, v. UBER TECHNOLOGIES, INC. and , RASIER, LLC, Defendants.

Civ. Action No. 16-4264 (FLW)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

May 31, 2017

*NOT FOR PUBLICATION*

OPINION

WOLFSON, District Judge:

Plaintiff Carlo Cavallo (hereinafter "Plaintiff"), an Uber driver, filed this action against Defendant Uber Technologies, Inc. (hereinafter "Defendant" or "Uber"), alleging that Defendant (i) misclassified him and other similarly situated New Jersey Uber drivers as independent contractors, rather than employees; (ii) failed to pay overtime compensation; and (iii) improperly interfered with Plaintiff's ability to accept gratuities. Defendant now moves to dismiss the Complaint and compel arbitration, arguing that Plaintiff is bound by the arbitration clause in the Raiser Software License and Online Services Agreement that Plaintiff signed before driving for Uber. For the reasons set forth below, the Court finds that a valid arbitration agreement between the parties exists. Defendant's motion is GRANTED.

BACKGROUND

Uber is a technology company that serves as a conduit between riders looking for transportation and drivers seeking riders. Declaration of Michael Colman (dated October 21, 2016) (hereinafter, "Colman Dec."), ¶ 3. Uber provides this technology through its smartphone application (hereinafter, the "Uber App") that allows riders and drivers to connect based on their geographic location. Colman Dec., ¶ 3. Raiser, LLC is a wholly owned subsidiary of Uber, and operates as a technology service provider. Colman Dec., ¶ 2.

Plaintiff registered with the Uber App in order to use its "uberX" platform, which provided him with the option to accept ride requests from prospective passengers and transport them for a fare. Colman Dec., ¶¶ 4, 13. In doing so, Plaintiff was required to electronically accept the applicable Raiser Software License and Online Services Agreement, which Uber subsequently updated on November 10, 2014 (hereinafter, the "Raiser Agreement").¹ Colman Dec., ¶¶ 7, 11. When Plaintiff logged on to the Uber App with his unique user name and password, he was given the opportunity to review the Raiser Agreement by clicking a hyperlink to the Raiser Agreement within the Uber App. Colman Dec., ¶ 9. To advance past the screen with the hyperlink and actively use the Uber App, Plaintiff must first confirm that he had reviewed and accepted the Raiser Agreement by clicking "YES, I AGREE." Colman Dec., ¶ 9. After clicking "YES, I AGREE," he was prompted to confirm that he reviewed and accepted the Raiser Agreement for a second time.² Colman Dec., ¶ 9.

Plaintiff was permitted to spend as much time as he found necessary in reviewing the Raiser Agreement on his smartphone or other electronic devices before accepting it. Colman Dec., ¶ 9. In fact, Plaintiff accepted the Raiser Agreement on January 20, 2015, over two months after it was made available for his review. Colman Dec., ¶ 13. On March 26, 2015, after Plaintiff confirmedhis acceptance for a second time through the Uber App, the Raiser Agreement was uploaded to Plaintiff's "driver portal," where he could access the Agreement at his own leisure, either online or by printing out a hard copy. Colman Dec., ¶ 15.

The first page of the Raiser Agreement contains a paragraph, written in large bold and capital text, indicating that a voluntary arbitration agreement (hereinafter, the "Arbitration Provision") is contained therein, and that Plaintiff should review the Raiser Agreement with an attorney, before agreeing to its terms and conditions:

IMPORTANT: PLEASE NOTE THAT TO USE THE UBER SERVICES, YOU MUST AGREE TO THE TERMS AND CONDITIONS SET FORTH BELOW. PLEASE REVIEW THE ARBITRATION PROVISION SET FORTH BELOW CAREFULLY, AS IT WILL REQUIRE YOU TO RESOLVE DISPUTES WITH THE COMPANY ON AN INDIVIDUAL BASIS THROUGH FINAL AND BINDING ARBITRATION UNLESS YOU CHOOSE TO OPT OUT OF THE ARBITRATION PROVISION. BY VIRTUE OF YOUR ELECTRONIC EXECUTION OF THIS AGREEMENT, YOU WILL BE ACKNOWLEDGING THAT YOU HAVE READ AND UNDERSTOOD ALL OF THE TERMS OF THIS AGREEMENT (INCLUDING THE ARBITRATION PROVISION) AND HAVE TAKEN TIME TO CONSIDER THE CONSEQUENCES OF THIS IMPORTANT BUSINESS DECISION. IF YOU DO NOT WISH TO BE SUBJECT TO ARBITRATION, YOU MAY OPT OUT OF THE ARBITRATION PROVISION BY FOLLOWING THE INSTRUTIONS PROVIDED IN THE ARBITRATION PROVISION BELOW.

Colman Dec., ¶ 13, Ex. C, at 1. A similar paragraph, also written in large bold and capital text, appears within the text of the arbitration provision itself, stating:

WHETHER TO AGREE TO ARBITRATION IS AN IMPORTANT BUSINESS DECISION. IT IS YOUR DECISION TO MAKE, AND YOU SHOULD NOT RELY SOLELY UPON THE INFORMATION PROVIDED IN THIS AGREEMENT AS IT IS NOT INTENDED TO CONTAIN A COMPLETE EXPLANATION OF THE CONSEQUENCES OF ARBITRATION. YOU SHOULD TAKE REASONABLE STEPS TO CONDUCT FURTHER RESEARCH AND TO CONSULT WITH OTHERS—INCLUDING BUT NOT LIMITED TO AN ATTORNEY—REGARDING THE CONSEQUENCES OF YOUR DECISION, JUST AS YOU WOULD WHEN MAKING ANY OTHER IMPORTANT BUSINESS OR LIFE DECISION.

Colman Dec., ¶ 13, Ex. C, § 15.3.

The Arbitration Provision requires transportation drivers, such as Plaintiff,—if they do not opt out—to individually arbitrate all disputes arising out of, or relating to, the Raiser Agreement, or their relationship with Uber, including disputes alleging breach of contract, wage and hour, and compensation claims. Colman Dec., ¶ 13, Ex. C, § 15.3. To that end, the Arbitration Provision, in pertinent part, reads as follows:

IMPORTANT: This arbitration provision will require you to resolve any claim that you may have against the Company or Uber on an individual basis pursuant to the terms of the Agreement unless you choose to opt out of the arbitration provision. This provision will preclude you from bringing any class, collective, or representative action against the Company or Uber. It also precludes you from participating in or recovering relief under any current or future class, collective, or representative action brought against the Company or Uber by someone else.

Colman Dec., ¶ 13, Ex. C, § 15.3. It further provides:

Except as it otherwise provides, this Arbitration Provision is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law or before a forum other than arbitration. This Arbitration Provision requires all such disputes to be resolved only by an arbitrator through final and binding arbitration on an individual basis only and not by way of court or jury trial, or by way of class, collective, or representative action.

Colman Dec., ¶ 13, Ex. C, § 15.3(i).

The Arbitration Provision also contains a delegation clause, requiring the arbitrator to decide issues of arbitrability:

Such disputes include without limitation disputes arising out of or relating to interpretation or application of this Arbitration Provision, including the enforceability, revocability or validity of the Arbitration Provision or any portion of the Arbitration Provision. All such matters shall be decided by an Arbitrator and not by a court or judge.

Except as it otherwise provides, this Arbitration Provision also applies, without limitation, to disputes arising out of or related to this Agreement and disputes arising out of or related to your relationship with the Company, including termination of the relationship.

Colman Dec., ¶ 13, Ex. C, § 15.3(i). Notably, after Plaintiff confirmed that he had reviewed and accepted the Raiser Agreement, including the Arbitration Provision, Plaintiff was provided with an additional 30 days to opt-out of the Arbitration Provision:

Your Right To Opt Out Of Arbitration.

Arbitration is not a mandatory condition of your contractual relationship with the Company. If you do not want to be subject to this Arbitration Provision, you may opt out of this Arbitration by notifying the Company in writing of your desire to opt out of this Arbitration Provision, either by (1) sending, within 30 days of the date this Agreement is executed by you, electronic mail to optout@uber.com, stating your name and intent to opt out of the Arbitration Provision or (2) by sending a letter by U.S. Mail, or by any nationally recognized delivery service (e.g., UPS, Federal Express, etc.), or by hand delivery to [Raiser's legal department].

Colman Dec., ¶ 13, Ex. C, § 15.3(viii).³ Notwithstanding these aforementioned provisions, Plaintiff filed this suit. Specifically, Plaintiff alleges that Defendant misclassified him and other similarly situated New Jersey Uber drivers as independent contractors, as opposed to employees, failed to pay overtime compensation, and improperly interfered with Plaintiff's ability to accept gratuities.

In the present matter, Defendant moves to dismiss the complaint and compel arbitration, arguing that Plaintiff has agreed to arbitrate issues of arbitrability, as well as his labor-related claims. However, in an attempt to circumvent the Raiser Agreement's Arbitration Provision, Plaintiff maintains that arbitration under the Agreement is unenforceable, because the arbitrationagreement (i) violates the National Labor Relations Act (hereinafter, the "NLRA") and the Norris-LaGuardia Act, and (ii) the delegation clause is "buried" within the text of the Agreement. Defendant disputes each of these contentions.

DISCUSSION

I. Standard of Review

The FAA "'creates a body of federal substantive law establishing and regulating the duty to honor an agreement to arbitrate . . . .'" Harris v. Green Tree Fin. Corp., 183 F.3d 173, 179 (3d Cir. 1999) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983)). The FAA was designed by Congress "'to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements upon the same footing as other...