by Catherine Fisk, Chancellor’s Professor of Law, University of California, Irvine School of Law
Although it has been widely reported that Uber has agreed to settle class action suits by drivers in California and Massachusetts, it is far from clear that the settlement will be approved or that, even if it is approved, it will resolve the question of the employment status of Uber drivers. And it seems fairly clear that the settlement does not protect some drivers from poor working conditions.
The two class actions allege that Uber misclassifies its drivers as independent contractors and thereby deprives them of the right to receive tips, minimum wage, overtime, and reimbursement for the expenses they incur (like the cost of the vehicle, insurance, and gas). The settlement agreement stipulates that, in exchange for payments totaling between $84 and $100 million and Uber’s agreement to modify the way it eliminates drivers from its program and to meet regularly with elected representatives of the Uber Driver Association, the plaintiff classes will abandon their claim that they are employees rather than independent contractors.
Uber has touted the settlement as a major victory in its effort to keep its drivers as independent contractors rather than employees. If the settlement is approved, it would be a temporary victory on that issue. Another judge recently rejected a proposed settlement of a similar action brought by Lyft drivers because the judge found the agreement on damages failed adequately to compensate the plaintiffs, but in his order rejecting the settlement the judge said that he would accept a settlement that did not provide that drivers were employees.
But Uber’s legal troubles over the employment status of its drivers will not end even if Judge Chen accepts the settlement, and there is no assurance that he will. Objections to the proposed settlement have been filed by other lawyers who represent some of the class members and who were apparently not involved in the settlement negotiations. And, of course, drivers who started working for Uber after the period covered by the suit are not among the plaintiffs in the class. Therefore, the settlement agreement will not foreclose them from suing for misclassification.