If you ever consider working for a gig-economy company, this case could be setting a significant precedent.
The case isn’t over, but a new chapter on what was once a potential multi-billion dollar class action lawsuit might now settle in the single digit millions. California Uber drivers’ attorney Christopher Morosoff has asked a state judge to accept Uber’s offer of $7.75 million to settle the drivers’ suit over employee status, according to Bloomberg.
In August 2016, U.S. District Court Judge Edward Chen refused to accept a $100 million settlement offer as much too low and granted class-action status to the drivers’ lawsuit — a status the settlement was meant to avoid. Subsequently in September Uber won an appeal that forced drivers to enter into arbitration with the company on an individual basis, which took the financial pressure off the rideshare company. Uber lost a similar case in the U.K. in October 2016, though, where drivers are now classified as employees, not self-employed independent contractors.
With no hope for a federal class-action suit, Uber driver Steven Price brought suit against Uber under a California statute known as a “bounty hunter law.” The Private Attorney’s General Act (PAGA), passed in 2004, lets employees bring enforcement actions against companies. PAGA lawsuits cannot be moved to arbitration.
When Morosoff presented the Price case in a hearing in San Francisco in June, with a list of 17 alleged labor code violations, he brought big numbers, based on a state labor enforcement agency estimate that the federal suit which was based on just two claims would have penalties of $1 billion.
“Do the math there,” Bloomberg reports Morosoff told U.S. District Judge Edward Chen at the time. “The numbers may be staggering, and they may be in the billions, and you may not want to look at them, but they are real.”
Now, however, the same attorney is calling the $7.75 million settlement offer “a reasonable and fair compromise,” Bloomberg reports. After the state takes a 75-percent share and the attorney fees, the amount remaining to be split among 1.6 million drivers would be $1.7 million, just over $1 each. Uber also claims that if the settlement is accepted it will apply to all PAGA claims from Uber drivers from early July 2013 until the date a state judge signs the settlement agreement. If the judge accepts the deal, it will close any chance for what was at one time a much larger potential payday for Uber drivers.
The original attorney for Uber drivers in the federal case, Shannon Liss-Riordan, said Uber went “forum shopping.” “It is looking for a judge who will approve a far smaller settlement than I had last year, which the federal court declined to approve,” Liss-Riordan wrote to Bloomberg an e-mail. “Now Uber is trying to get a settlement approved in state court for a lower amount for the PAGA claims than Judge Chen said he would not approve, but without the drivers getting the benefit of the far larger settlement that I was able to negotiate.”