Judge Rejects Uber $100 Mln Settlement with Drivers

A federal judge rejected the proposed $100 million class action settlement over the status of Uber drivers who said they should be treated as employees for wages and expenses.

U.S. District Judge Edward Chen found the proposed deal basically unfair in part because it would waive the rights of drivers in 15 other unrelated cases to bring claims and cut a large chunk of potential money to drivers under the Private Attorney General Act (PAGA).

The settlement would have affected nearly 250,000 drivers in California and Massachusetts who driver for UberX, UberBlack and UberSUV since 2009. The deal called for Uber to pay $84 million, bumped up by another $16 million if its Initial Public Offering of stock goes well.

It would keep the drivers as independent contractors, rather than converting them to employees, but Uber agreed to meet with a driver association to resolve issues and to clarify its tipping practices.

Under terms of the now-rejected settlement, California class members would get an average of $24 to $1,950, depending on the amount of driving they did. Non-class members could get $10 to $836 and Massachusetts drivers would get an average payout of $12 to $979.

The settlement called fro a $1 million payment for the PAGA. Plaintiffs estimated the value of a jury verdict on non-PAGA claims to be near $854 million.

Chen fielded plenty of complaints from unhappy class members.

“The settlement as a whole as currently structures is not fair, adequate, and reasonable,” Chen concluded.

Case: O’Connor v. Uber, No. 13-cv-3826



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