Federal Judge Rejects Uber's $100M Settlement Offer to Its Drivers

Now it is time for the real game of chicken. Since the Federal District Court Judge overseeing what is likely the biggest labor law case in history has rejected the $100,000,000.00 settlement Uber was going to pay to its drivers, both sides will have to move forward. The stakes are high for the drivers, even higher for the lawyers for Uber and the highest for Uber itself. The drivers have little to lose as most would only get peanuts. The lawyers for Uber agreed to reduce their legal fee from $25,000,000.00 to $10,000,000.00 to push the settlement through. But for Uber, it may be winner take all. Uber may move forward and win simply because the appeals court may not permit the class action to move forward at all, thus killing the case as all drivers would be then forced to arbitration on a case by case basis. On the other hand, if the case moves forward in class action status and Uber loses, the gig economy may be upended, Uber's $65 billion dollar valuation make implode and Uber as we know it may be over. I for one am happy that the case must move forward. The drivers are the client's and they should be zealously represented and not sold out by their lawyers who simply wanted to cash in before the oven got too hot and they were at a severe risk of losing any legal fee they could have earned. As I have written before, I have never seen a case so clear for employee-employer relationship as Uber and its drivers in my 20 years of practicing law. The Judge overseeing the case must agree that the case has great merit, otherwise, the $100M offered would have been a windfall and no judge would have declined to approve such a settlement for a meritless case. Time will tell what happens when the appeals court rules on the class action status (obligation of each driver to go to arbitration as opposed to court) and we will see who blinks first.......the 800 pound Gorilla (Uber) or the lawyers who are now forced to either move the case forward on its merits or to obtain a better and increased monetary settlement from Uber. Grab tour seats because this issue is far from over.