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Uber Will Pay $8.4 Million to End Years-Long Driver Class Action

Feb. 18, 2022, 6:47 PM

A proposed $8.4 million deal reached between Uber Technologies Inc. and more than 1,300 California drivers, who alleged they were misclassified as contractors, would end one of the gig economy court battles that predate the passage of Proposition 22.

The settlement award would go to about 1,322 drivers who opted out of arbitration agreements and worked for the company between Feb. 28, 2019, and Dec. 17, 2020, according to a motion for preliminary approval filed on Thursday. The December date reflects the enactment of Prop. 22, a ballot initiative that Uber helped to fund to cement app-based drivers as independent contractors.

Uber and the drivers agreed to dismiss the case in November after signaling they had reached an agreement. The deal is slated for a final approval hearing before the U.S. District Court for the Northern District of California in June. It would follow a $20 million settlement approved by the same court in 2019 between Uber and 15,000 California and Massachusetts drivers.

The settlement doesn’t answer the question of whether Uber drivers are employees entitled to benefits such as overtime, minimum wage, and business expenses—an issue that continues to be debated despite Prop. 22, which was struck down by a state judge as unconstitutional. A California appellate court is weighing that challenge.

Of the $8.4 million proposed settlement, administration costs totaled $29,000; requested attorneys’ fees represent a quarter or $2.1 million; and each named plaintiff will receive $10,000. Each driver, under the proposed settlement, would be entitled to part of the settlement based on the number of miles drivers picked up passengers and food deliveries, as well as the number of miles driven. The drivers’ attorney Shannon Liss-Riordan anticipated about half of the class will submit a claim.

Lichten & Liss-Riordan PC represents the proposed class. Gibson, Dunn & Crutcher LLP represents Uber.

The case is James v. Uber Technologies, Inc., N.D. Cal., No. 3:19-cv-06462, motion for preliminary approval 2/17/22.

To contact the reporter on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editor responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com