Uber and the Boston-based plaintiff attorneys litigating O’Connor v. Uber Technologies have announced a settlement of the class action challenging the classification of Uber drivers as independent contractors.
The settlement, which voids a summer trial, must be approved by U.S. District Court Judge Edward Chen. While that may well happen, an attempted resolution of a class action between the same plaintiff attorney, Shannon Liss-Riordan, and Lyft (Cotter v. Lyft) was rejected as inadequate by U.S. District Court Judge Vince Chhabria.
The proposed O’ Connor v. Uber settlement will certainly provide a big payday for the Ms. Liss-Riordan and her Boston firm. And it will result in some modifications of the Uber driver arrangement that will benefit workers, including measures to clarify driver de-activation and to allow for driver tipping (at the end of this post I’ve included a link to a blog entry from Uber’s founder which outlines some of these changes).
According to one analysis from Marketwatch.com, although some drivers could receive as much as $8,000, the settlement could net most drivers $24 or less.
What the proposed settlement does NOT do is provide any definitive resolution of the dispute as to whether Uber drivers are employees or independent contractors.
I’ll leave it to other commentators and to Judge Chen as to whether the O’Connor settlement is a mediocre result where a plaintiff firm caved on the verge of trial or an acceptable resolution under the facts and litigation circumstances.
Readers should keep in mind that there are other Uber cases in process in different states and in different California forums. Among them is Uber v. Barbara Berwick, an action in which Uber is appealing a June 3, 2015 determination by the California Labor Commissioner. The Labor Commissioner found that Ms. Berwick was an employee and awarded her $3,878.08 in expenses and penalties. A link to the Labor Commissioner’s decision is posted below.
What does the resolution in O’Connor mean for workers’ comp claims, however?
It’s fair to say that many attorneys expected that O’Connor might be a prominent vehicle to resolve the employee vs. independent contractor issue.
With that case seemingly off the table, it may well be that the California Workers’ Compensation Appeals Board will become a prominent venue for determination on the issue.
Given the volume of cases that are heard by the California WCAB, it’s quite possible that there are Uber or Lyft cases in process at the WCAB already. If not, I expect that such cases will be filed.
Since the WCAB tends to move faster than many other forums, it is quite conceivable that a trial level WCAB decision on Uber/Lyft employment status could go up to a WCAB en banc and then to the Court of Appeal.
Interestingly, one of the leading California cases on employee vs. independent contractor is the 1991 case Yellow Cab Cooperative Inc. v. WCAB (226 Cal. App. 3d 1291). Probable gubernatorial candidate Gavin Newsom’s father William Newsom was one of the Court of Appeals Justices in that case, which found that a Yellow Cab driver was an employee for workers’ comp purposes.
Whether the employment vs. independent contractor issue will first get to the Court of Appeal via a workers’ comp route or the Labor Commissioner route isn’t clear.
But I do expect that this issue will be a high profile one at the WCAB over the next several years.
Meanwhile, the Teamsters have announced plans that they will be attempting to organize the Uber drivers. Recently the Teamsters have had some major successes organizing employees of various contractors at Silicon Valley companies.
These issues are not going to go away. Indeed, perhaps that’s one reason that the settlement amount is so limited. Both sides live to fight another day.
Here is a link to my earlier post on “The Uber Cases”:
http://www.workerscompzone.com/2015/06/19/the-uber-cases/
Here is a link to Travis’ Kalanick’s post titled “Growing and Growing Up” about the O’Connor class action proposed settlement:
https://newsroom.uber.com/growing-and-growing-up/
And here is the Labor Commissioner’s decision in the Berwick case:
Stay tuned.
Julius Young
510.835.8870