Thursday, April 21, 2016 at 8:06:43 PM Pacific Daylight Time

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Breaking news - Uber will pay $100 million to se8le independent contractor misclassifica<on claims
Thursday, April 21, 2016 at 7:26:42 PM Pacific Daylight Time
Shannon Liss-Riordan
Shannon Liss-Riordan
Adelaide Pagano

Breaking news - Uber will pay $100 million to seNle independent contractor misclassificaOon claims in
California and MassachuseNs; will make significant policy changes; drivers will be permiNed to place signs
in their cars noOfying customers that "Ops are not included" and would be appreciated; Uber to recognize
Driver AssociaOon to bring drivers' issues of concern to Uber management
 
 
We are very pleased to announce that Uber has agreed to a historic se8lement of the claims we have
brought in California and Massachuse8s for misclassifying its drivers as independent contractors.
 
Under this agreement, Uber has agreed to pay up to $100 million to resolve these claims and will implement
a number of significant policy changes.  (Of the payment, $84 million is guaranteed and $16 million is
con<ngent on an increase in Uber's future value.)  These changes include:
 
- Uber will no longer be able to deac<vate drivers at will.  Instead, drivers may only be terminated for
sufficient cause.  And drivers will receive warnings in most instances and thus opportunity to correct any
issues prior to deac<va<on.
 
- Drivers will not be subject to deac<va<on for low acceptance rates.
 
- Uber will ins<tute appeal panels (made up of highly rated drivers) so that drivers who believe they have
been unjustly terminated may bring their concerns to a panel of their peers.
 
- Drivers who are not sa<sfied with the result of these appeals can bring their claim to a neutral arbitrator, at
Uber's expense, who will determine if there was sufficient cause for the deac<va<on.
 
- Uber will ins<tute an internal escala<on process for disputes regarding their pay.
 
- Uber will facilitate and recognize the forma<on of a Driver Associa<on, which will have leaders elected by
fellow Uber drivers, who will be able to bring drivers' concerns to Uber management, who will engage in
good faith discussions (on a quarterly basis) regarding how to address these concerns.
 
- Finally, under the agreement, Uber will make clear to riders that <ps are not included in Uber's fares. 
Drivers will be permi8ed to put small signs in their cars sta<ng that "<ps are not included, they are not
required, but they would be appreciated."
 
We believe these to be very significant changes that will improve work condi<ons for Uber drivers.  While this
case has been pending, we have heard many complaints from drivers about being deac<vated without good
cause and frustra<ons about pay issues that they have not been able to get addressed by Uber management. 
 
We have also heard many concerns that Uber does not consider how its policies impact its drivers and don't
take the drivers' views into account when se_ng policies.  The forma<on of the driver associa<on - while not
an officially recognized union - can play a role similar to a union, to bring drivers' grievances and concerns to
Uber management, who will meet with the associa<on's leaders on a quarterly basis to engage in good faith
discussions about issues of concerns to drivers.
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And finally, we believe it is a significant achievement that Uber will now be clear to riders that <ps are
actually NOT included in Uber's fares.  Drivers will be able to place signs in their cars informing riders that <ps
are not included, and while they are not required, they would be appreciated.  By Uber making clear to riders
that <ps are not included, we believe that many riders will now <p their Uber drivers because riders have
been under the impression from Uber's prior communica<ons that <ps are included in the fares.  When
riders have the correct informa<on, we expect they will be generous and apprecia<ve of good service and
many will <p their drivers.  As a result, we expect that Uber drivers will receive substan<ally more pay as a
result of riders' generosity, when riders are no longer under the misimpression that <ps are already included.
 
We realize that some will be disappointed not to see this case go to trial in June.  We were looking forward to
this trial.  But we believe the se8lement we have been able to nego<ate for Uber drivers throughout
California and Massachuse8s provides significant benefits - both monetary and non-monetary - that will
improve the work lives of the drivers and jus<fies this compromise result (which will not result in the drivers
being reclassified).
 
Importantly, the case is being se8led - not decided.  No court has decided here whether Uber drivers are
employees or independent contractors and that debate will not end here.  This case, however, with this
significant payment of money, and a8en<on that has been drawn to this issue, stands as a stern warning to
companies who play fast and loose with classifying their workforce as independent contractors, who do not
receive the benefits of the wage laws and other employee protec<ons.  As a result of this li<ga<on, many
companies have chosen to go the other way and not fight this ba8le, and instead to classify their workers as
employees with all the protec<ons that accompany that classifica<on.
 
And if we chose not to se8le this case, we faced risks.  We faced the risk that a jury in San Francisco (where
Uber is everywhere and quite popular) may not side with the drivers over Uber.  We faced a risk that the
Ninth Circuit may disagree with the district court on his rulings cer<fying the case as a class ac<on and
holding Uber's arbitra<on clause to be unenforceable.  If the Ninth Circuit Court of Appeals had disagreed
with the district court on either of these two points, then the vast majority of Uber drivers would never
receive anything at all for these claims and the non-monetary changes that are being made as a result of this
se8lement would not occur.  Just recently, the Ninth Circuit issued an unusual order agreeing to review the
district court's class cer<fica<on order right away, possibly before the upcoming trial (and may have issued an
order to delay the trial).  And even if the Ninth Circuit agreed with us and affirmed the district court's rulings
regarding class cer<fica<on and arbitra<on, Uber made clear it would try to appeal this case to the U.S.
Supreme Court, which has been quite friendly in recent years to companies using arbitra<on agreements to
prevent individuals from banding together to hold companies accountable to complying with the laws on a
classwide basis.
 
Thus, if we had not se8led, there were some serious risks that all we have fought for - and have achieved could be taken away.  We balanced this risk in deciding what would be a fair resolu<on of this case. 
 
It is our hope and belief that this agreement - a historic agreement - and one of the largest ever achieved on
behalf of workers claiming independent contractor misclassifica<on - will provide significant benefits to
drivers, both monetary and non-monetary, that will improve their work lives, will increase their income
through providing clarity to passengers regarding Uber's <pping policies, and will foster a construc<ve
dialogue between drivers and Uber regarding issues of concern to drivers, so as to improve the work lives of
the drivers and improve how the company operates with greater input from the drivers themselves who are
the backbone of the company.
 
Moreover, the payments drivers will receive under this se8lement are significant.  We have calculated the
es<mated distribu<on for drivers who have driven different amounts of miles with Uber passengers in the
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 car.  Drivers falling into the category of those who have driven the greatest number of miles (more than
25,000) may receive $8,000 or more on average (if they opted out of Uber's arbitra<on clause, and if the
claim rate for the se8lement is what is expected, approximately half).  Drivers who drove fewer miles will
receive lower shares.  The formula accounts also for whether the drivers worked in California or
Massachuse8s (more of the se8lement is allocated for California), whether they were included in the
cer<fied class (those who were will receive double credit for their miles), and whether they opted out of
Uber's arbitra<on clause (those who did will also receive double credit).
 
We are very proud of this achievement and look forward to these changes being implemented for the benefit
of Uber drivers.
 
Shannon Liss-Riordan
Adelaide Pagano
 
 
------------------------------Shannon Liss-Riordan
Lichten & Liss-Riordan, P.C.
729 Boylston Street, Suite 2000
Boston, Massachuse8s 02116
Tel: (617) 994-5800
Fax: (617) 994-5801
sliss@llrlaw.com
www.llrlaw.com
 

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