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No end in sight for protracted class action employment case

The ubiquitous public transportation company Uber certainly had reason to cheer in the immediate wake of a settlement it forged this past April with many thousands of disgruntled drivers .

Class-action litigation had been ongoing for several years prior to the agreed-upon pact reached with the drivers' legal team this spring. The central thrust of the settlement was the $100 million slated to be paid as damages to approximately 400,000 drivers. A core contention in the case centered on the drivers' claim that they were sufficiently controlled by Uber to be deemed company employees. Uber had steadfastly maintained that the workers were independent contractors.

 

Uber desperately wanted to prevail on that point, given that an "employee" designation would have put the company on the hook for a far higher outlay in damages. Many case commentators thought that the $100 million was a victory for the company.

Any post-pact celebrations turned out to be short-lived, however, as a federal judge tossed the pact last week, deeming it "not fair, adequate, and reasonable" to the drivers. What perhaps emerged as most notable in the court's ruling, as reported in a recent New York Times article on the matter, was its determination that the $100 million comprised "only 0.1 percent of the potential full verdict value."

Extrapolated, that of course equates to a staggering $10 billion.

Uber is certainly not celebrating now.

Nor are many other companies operative across the country, including in Connecticut, that have a business model similar to that employed by Uber (that is, classifying workers as independent contractors and thus avoiding higher payout amounts that are required for regular employees).

The Uber case will likely now drag out further, while continuing to attract widespread attention for the debate it has engendered regarding on-the-job worker classification.

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