O'Connor v. Uber Technologies, Inc.

Background

The plaintiffs brought two lawsuits alleging that Uber misclassified its drivers as independent contractors rather than employees. After five years of litigation, the parties agreed to settle both cases. The court had granted preliminary approval on March 29, 2019.

The settlement class covered drivers in California and Massachusetts who had used the Uber app from August 16, 2009, through February 28, 2019, and who had validly opted out of arbitration or for whom Uber had no record of an accepted arbitration agreement. The settlement excluded, among others, Uber directors, officers, agents, and people Uber designated as employees, as well as people who timely opted out.

The agreement provided a $20 million non-reversionary fund. The court stated that approximately $14,348,900 was expected to be distributed to class members who submitted timely claims after deductions for litigation-related amounts, claims administration, and incentive awards. Payments were to be based on each claimant’s mileage. The agreement also required Uber to adopt a written driver-account deactivation policy, add safeguards to that policy, and offer certain deactivated drivers an opportunity to take a course and be considered for reactivation. Those changes would last no more than two years, subject to an earlier change in applicable law.

The settlement released claims related to the allegations in the lawsuits, but it did not resolve the underlying question whether Uber drivers were employees or independent contractors. It also did not include or release claims under California’s Private Attorneys General Act. The plaintiffs filed a Fifth Amended Complaint adding claims involving tips, unjust enrichment, conversion, fraud, California Labor Code violations, and the federal Fair Labor Standards Act.

Notice and Class Response

The settlement administrator sent court-approved notices by email and mail and issued multiple reminders. The opinion states that notices were ultimately deliverable to more than 96% of the 15,710 recipient class members. By August 23, 2019, 5,627 timely claim forms had been received, representing 67.3% of the fund assuming full participation. Two people ultimately opted out, and four objections were filed by three parties.

The objectors raised concerns about attorneys’ fees, the clarity of estimated settlement payments, notice of the opt-out deadline, alleged harms from working for Uber, alleged violations of various laws, and the settlement’s failure to decide the worker-classification issue. The court found that the notice was adequate, overruled the objections, and concluded that the objections concerning alleged harms and driver classification were outside the settlement’s scope. The court stated that future actions seeking to decide those issues were not precluded by the settlement.

Final Approval

The court confirmed that the requirements for class certification under Federal Rule of Civil Procedure 23 remained satisfied. It found that the settlement was fair, reasonable, and adequate, including because of the settlement’s monetary and non-monetary relief, the risks and expense of continued litigation, the work performed by counsel, and the class’s largely favorable response.

The court GRANTED the plaintiffs’ Motion for Final Approval of the Class Action Settlement Agreement and Release. It also granted final approval to the settlement and the plan for allocating the settlement fund, incorporated the settlement into the final approval order, and directed that final judgment be entered immediately.

Attorneys’ Fees, Costs, and Awards

The court confirmed Lichten & Liss-Riordan, P.C. as class counsel. The plaintiffs requested $5 million in attorneys’ fees and costs, approximately 25% of the common fund. The court considered the results obtained, the risks of litigation, counsel’s skill and work, the contingent nature of the representation, awards in similar cases, and a lodestar cross-check—a comparison with the time counsel reasonably spent multiplied by reasonable hourly rates.

The court found that class counsel adequately represented the settlement class and AWARDED $5,000,000 in attorneys’ fees, to be paid from the settlement amount. It also AWARDED $311,091.67 in additional out-of-pocket costs.

The court approved incentive awards totaling $40,000 for the named plaintiffs: $7,500 each for Matthew Manahan, Elie Gurfinkel, Pedro Sanchez, and Mohktar Talha, and $5,000 each for Aaron Dulles and Antonio Oliveira. It also ordered $300,000 to be paid to Epiq, the settlement administrator, for unreimbursed notice and administration expenses.

Judgment and Effect of the Settlement

The order dismissed the released claims of settlement class members, named plaintiffs, and authorized claimants with prejudice and without costs. It made the settlement binding on covered parties and gave it preclusive effect for proceedings involving the released claims. It permanently barred covered class members and named plaintiffs from bringing or organizing covered claims in another lawsuit, administrative proceeding, regulatory proceeding, arbitration, or other proceeding, subject to the settlement’s terms.

The order preserved claims concerning the classification status of drivers. The court retained jurisdiction over the named plaintiffs, settlement class, and defendants for matters involving administration, completion, and enforcement of the settlement. The order disposed of Docket Nos. 954 and 935.