Judge to Uber: No on $100M Settlement Proposal Until More Question Are Answered

Tuesday, July 5, 2016 | 0

A federal judge did not approve Uber's proposed $84 million to $100 million class-action suit settlement with 385,000 drivers, questioning whether the deal would adequately compensate drivers who, under terms of the settlement, would remain independent contractors, the San Francisco Chronicle reported.

U.S. District Judge Edward Chen of San Francisco asked for more information from all sides by July 15 before he decides what to do with the proposal, which he did not reject outright. He could either approve the settlement or send the case to trial.

The drivers claimed Uber violated California labor laws by classifying them as independent contractors while treating them like employees. If the case were to go to trial and the drivers win employee status, the claim could be worth more than $1 billion.

Drivers would obtain benefits such as workers' compensation and overtime, and the state would be entitled to three-fourths of any labor law penalties, which were valued at $1 million under the proposed settlement. 

“The parties should provide more substantial legal authority for why a 99.9% discount (in the labor penalties) is warranted,” Chen said.

He said the two sides had not come to an agreement on drivers' claims seeking payment for meal and rest breaks, waiting times between rides and the denial of workers’ compensation benefits. The claims would be dismissed if the settlement were approved, the Chronicle reported.

Chen said he would reconsider the settlement when more information is provided or some terms are changed.