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http://www.sfgate.com/bayarea/article/State-questions-its-share-of-proposed-deal-8680222.php
State questions its share of proposed deal between Uber, drivers
By Bob Egelko
Updated 7:38 pm, Friday, July 29, 2016
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Photo: Siana Hristova, The Chronicle
The settlement would get the state $1 million; going to trial could get it three-fourths of perhaps $1 billion.
A California labor agency has raised questions about a proposed Uber settlement that would give the state $1 million of the $84 million to $100 million set aside for the company's drivers in California and Massachusetts and their lawyers.
Replying to a federal judge, who had also questioned the adequacy of the settlement, a lawyer for the state Labor and Workforce Development Agencysaid Friday he saw "no rationale" for the $1 million figure, "other than that this is a round number and a large figure" compared with the state's share of other labor settlements.
The attorney, John Cumming, said the agency agreed with U.S. District Judge Edward Chen of San Francisco that Uber could be on the hook for more than $1 billion in labor law penalties if the drivers go to trial and prove they should be classified as employees instead of independent contractors. The state would be entitled to three-fourths of those penalties, and the drivers would get the rest.
The suit was filed in 2013 on behalf of 385,000 Uber drivers in the two states, challenging the ride-hailing company's classification of them as independent contractors rather than employees entitled to overtime, work expenses and other benefits. The settlement, negotiated by a lawyer for drivers in a class-action suit, would not affect that contractor status.
Chen withheld approval of the settlement June 30 and said he wasn't sure it would compensate drivers adequately for the claims they were giving up by not going to trial. He asked the plaintiffs and the company for more information before deciding whether to approve the deal or send the case to trial, and also sought input from the labor agency on the $1 million allotted to the state.
Other groups of drivers have filed separate lawsuits against Uber, also claiming employee status and seeking payment for meal and rest breaks, waiting times between rides, and to make up for the denial of workers' compensation benefits because of their contractor status. The settlement, if approved, would require dismissal of those suits.
The settlement would increase from $84 million to $100 million if Uber, now privately held, begins selling its shares publicly. Those amounts would include $11 million to $15 million for plaintiffs attorney Shannon Liss-Riordan, who reached the agreement after three years of negotiations with the company.
The settlement would get the state $1 million; going to trial could get it three-fourths of perhaps $1 billion
The suit sought damages for the drivers' wages and work expenses, and also exposed Uber to potential penalties for violating state labor laws.
Private settlements generally classify a portion of their funds as penalties shared with the state. For example, an agreement to which a federal judge gave preliminary approval in June provided $27 million for 163,000 California drivers of the ride-hailing company Lyft, and designated $1 million of that sum as penalties.
Bob Egelko is a San Francisco Chronicle staff writer. Email: [email protected]
http://www.sfgate.com/bayarea/article/State-questions-its-share-of-proposed-deal-8680222.php
State questions its share of proposed deal between Uber, drivers
By Bob Egelko
Updated 7:38 pm, Friday, July 29, 2016
Photo: Siana Hristova, The Chronicle
The settlement would get the state $1 million; going to trial could get it three-fourths of perhaps $1 billion.
A California labor agency has raised questions about a proposed Uber settlement that would give the state $1 million of the $84 million to $100 million set aside for the company's drivers in California and Massachusetts and their lawyers.
Replying to a federal judge, who had also questioned the adequacy of the settlement, a lawyer for the state Labor and Workforce Development Agencysaid Friday he saw "no rationale" for the $1 million figure, "other than that this is a round number and a large figure" compared with the state's share of other labor settlements.
The attorney, John Cumming, said the agency agreed with U.S. District Judge Edward Chen of San Francisco that Uber could be on the hook for more than $1 billion in labor law penalties if the drivers go to trial and prove they should be classified as employees instead of independent contractors. The state would be entitled to three-fourths of those penalties, and the drivers would get the rest.
The suit was filed in 2013 on behalf of 385,000 Uber drivers in the two states, challenging the ride-hailing company's classification of them as independent contractors rather than employees entitled to overtime, work expenses and other benefits. The settlement, negotiated by a lawyer for drivers in a class-action suit, would not affect that contractor status.
Chen withheld approval of the settlement June 30 and said he wasn't sure it would compensate drivers adequately for the claims they were giving up by not going to trial. He asked the plaintiffs and the company for more information before deciding whether to approve the deal or send the case to trial, and also sought input from the labor agency on the $1 million allotted to the state.
Other groups of drivers have filed separate lawsuits against Uber, also claiming employee status and seeking payment for meal and rest breaks, waiting times between rides, and to make up for the denial of workers' compensation benefits because of their contractor status. The settlement, if approved, would require dismissal of those suits.
The settlement would increase from $84 million to $100 million if Uber, now privately held, begins selling its shares publicly. Those amounts would include $11 million to $15 million for plaintiffs attorney Shannon Liss-Riordan, who reached the agreement after three years of negotiations with the company.
The settlement would get the state $1 million; going to trial could get it three-fourths of perhaps $1 billion
The suit sought damages for the drivers' wages and work expenses, and also exposed Uber to potential penalties for violating state labor laws.
Private settlements generally classify a portion of their funds as penalties shared with the state. For example, an agreement to which a federal judge gave preliminary approval in June provided $27 million for 163,000 California drivers of the ride-hailing company Lyft, and designated $1 million of that sum as penalties.
Bob Egelko is a San Francisco Chronicle staff writer. Email: [email protected]
