## Facts

- Uber drivers Abdul Kadir Mohamed and Ronald Gillette accepted electronic driver agreements required to access Uber’s app.
- The agreements required arbitration of disputes and included a delegation clause assigning the arbitrator authority to decide the “enforceability, revocability or validity” of the arbitration provision.
- The agreements included class-action and PAGA waivers, and provided an opt-out procedure allowing drivers to reject arbitration within a limited period by written notice.
- Uber obtained background checks through Hirease and, based on negative information in consumer reports, terminated the drivers’ access to the app.
- The drivers sued alleging violations of the Fair Credit Reporting Act and related state laws; Gillette also asserted a representative PAGA claim based on alleged employee misclassification.
- The district court denied Uber’s motions to compel arbitration, finding no clear delegation and concluding the arbitration provisions were unconscionable; it also denied Hirease’s request to join the motion to compel arbitration.

## Issues

1. Whether the agreements clearly and unmistakably delegated gateway arbitrability questions to the arbitrator.
2. Whether the delegation clause itself was unenforceable as unconscionable under California law.
3. Whether a contractual waiver of representative PAGA claims was enforceable, and if not, whether it could be severed while compelling arbitration of other claims.
4. Whether Hirease, as a third-party background-check provider, could compel arbitration under the drivers’ agreements.

## Decision

- Reversed in part the denial of Uber’s motions to compel arbitration.
- Held the delegation language clearly and unmistakably assigned arbitrability disputes to the arbitrator.
- Held the delegation clause was enforceable; the court could not decide challenges directed at the arbitration agreement generally once a valid delegation existed.
- Held Gillette’s PAGA waiver was invalid under California law but severable; his representative PAGA claim could proceed in court while other claims went to arbitration.
- Affirmed the denial of Hirease’s attempt to compel arbitration.

## Legal Principles

- Under the Federal Arbitration Act, parties may delegate gateway questions of arbitrability to the arbitrator if the agreement shows clear and unmistakable intent.
- When an agreement delegates disputes over the “enforceability, revocability or validity” of the arbitration provision, courts must send challenges to the arbitration agreement as a whole to the arbitrator; courts may address only a specific challenge to the delegation clause itself.
- An opt-out mechanism is relevant to procedural unconscionability; the unconscionability inquiry must target the delegation provision when delegation is invoked.
- Under California law, a complete waiver of the right to bring representative PAGA claims is unenforceable, but an invalid PAGA waiver may be severed if consistent with the parties’ contract and the remainder is enforceable.
- A nonsignatory may compel arbitration only if the contract’s terms or applicable enforcement doctrines permit; a third-party vendor outside the agreement’s enforcement scope cannot compel arbitration.

## Conclusion

The Ninth Circuit enforced Uber’s delegation clauses, limiting judicial review to challenges directed specifically at delegation, required arbitration of most disputes, severed an invalid PAGA waiver to allow Gillette’s representative PAGA claim to proceed in court, and held Hirease could not compel arbitration under the drivers’ agreements.


Mohamed v. Uber Techs., Inc., 848 F.3d 1201 (9th Cir. 2016)