Uber Reaches Settlement in 20 Million Dollar Suit Over Classification of Drivers
Los Angeles, CA (Law Firm Newswire) May 22, 2019 – Ride-share company Uber Technologies Inc. and its former CEO agreed to a $20 million settlement in a lawsuit regarding the classification of its drivers.
The proposed settlement comes after more than five years of litigation involving 13,600 drivers from California and Massachusetts. Drivers with the company are considered independent contractors; however, the lawsuit claimed that this classification violates labor laws. It claims Uber does so to avoid paying for traditional employee benefits like minimum wage, overtime and sick pay.
“With the rise of the gig economy and the prevalence of independent work, it is important to be sure that companies are not taking advantage of workers,” says attorney Betsy Havens, executive director at Strong Advocates. “Uber is a leader in the ride-share industry and of the changing work economy; its policies will influence other companies that also use independent labor.”
Along with the financial payout, the settlement also includes changes to Uber’s driver deactivation policy. The company will no longer deactivate a driver’s account if they do not accept a certain number of rides, and it will give advanced notice when a driver is deactivated.
Drivers said that the rules about deactivation were unclear and that they felt anxiety about the possibility of being fired suddenly. There will also be an appeals process and a quality course for deactivated drivers who would like to be considered for reinstatement.
The 13,600 drivers in this case who will receive payments from Uber are only a small percentage of drivers who have been wronged. Thanks to a U.S. Court of Appeals for the Ninth Circuit ruling, which upheld Uber’s arbitration clause, the drivers from California and Massachusetts were the only ones able to sue as they had opted out of the clause.
Strong Advocates is a Los Angeles-area employment law firm with experience protecting the rights of workers. Contact them at https://www.strongadvocates.com/
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