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Friday, June 3, 2016

It Didn't Go Well For the Proposed Uber Settlement Yesterday

Posted By on Fri, Jun 3, 2016 at 1:55 PM

click to enlarge What a deal. - FLICKR/DENNIS
  • Flickr/Dennis
  • What a deal.
It doesn't look great for the proposed $84 million settlement the lawsuit filed against ride-share giant Uber by the hundreds of thousands of its drivers, after the judge overseeing the case said Thursday the settlement gives him "serious concerns." 

In 2013, Uber drivers filed a massive class-action suit against the $62 billion company, alleging Uber was withholding tips and classifying drivers as independent contracts while treating them as employees. A few weeks ago, not long before the possibly momentous trial was to begin — the result of which could have threatened the very basis for how workers are classified in the Silicon Valley gig economy — Uber reached a settlement with the drivers' attorney, Shannon Liss-Riordan.

Under the terms, Uber drivers could collect tips but will remain contractors. On top of that, drivers could not file further lawsuits challenging their employment status and certain work conditions. In return, drivers would receive a settlement check ranging from between $25 to $218 — while Liss-Riordan's firm would pocket $25 million. If Uber went public, the settlement would increase from $84 million to $100 million.

That led to a revolt, with both the lead plaintiff and hundreds of drivers asking Judge Edward Chen to reject the settlement and remove Liss-Riordan as attorney, and other attorneys, filing separate actions, guessing that the damages in the case could be worth more than $1 billion.

On Thursday, Chen subjected both Liss-Riordan and Uber attorneys to some withering scrutiny,
putting the former adversaries on the collective defensive.
Chen called the settlement "unusual." 

"One could say is there something wrong when claims from another case are essentially hijacked, taken or stolen from other litigation, folded into this case as part of a settlement, and on top of that given virtually no value," he said, according to Courthouse News. "Isn't that troubling?"

Chen paid particular attention to the portion of the settlement that would preclude drivers from opting out of the settlement and pursuing their own cases in court. Legal news outlet The Recorder reported that Chen leaned towards rejecting that portion of the settlement — which could in turn tank the whole deal.

Other attorneys crowding around the case on drivers' behalf point out that the main focus of the original lawsuit — whether drivers are contractors or employees — goes untouched by the settlement, which should be rejected for that reason.

Chen gave no indication of when he might rule.

But, "by the nature and tone of everything, that looked like a rejection," said Edward Escobar, an Uber driver who is serving as spokesman for a group of drivers calling itself United Drivers. 

More hearings are scheduled for July.
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About The Author

Chris Roberts

Bio:
Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.

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