O'Connor v. Uber Techs., Inc.

O'Connor v. Uber Techs., Inc.

Opinion

 [*1113]  ORDER DENYING PLAINTIFFS' MOTION FOR PRELIMINARY APPROVAL

O'Connor, Docket No. 518

Yucesoy, Docket No. 206

I. INTRODUCTION

Plaintiffs brought the instant class action and putative class action against Defendant Uber Technologies, Inc., alleging that Uber misclassifies drivers as independent contractors rather than employees. O'Connor v. Uber Techs., Inc., Case No. 13-cv-3826-EMC, Docket No. 330 (Second Amended Complaint) (SAC) at ¶ 3; Yucesoy v. Uber Techs., Inc., Case No. 15-cv-262-EMC, Docket No. 198 (Fourth Amended Complaint) (FAC) at ¶ 2. Following three years of contentious litigation, the parties entered into a Settlement Agreement shortly before the O'Connor trial was to begin. O'Connor, Docket No. 518; Yucesoy, Docket No. 206.¹

Plaintiffs' motions for preliminary approval came on for hearing before the Court on June 2, 2016. The Court has also reviewed the [**10]  parties' briefing and supplemental briefing, as well as the many objections challenging the adequacy of the Settlement Agreement. It also invited and considered the comments of the California Labor and Workforce Development Agency (LWDA). While recognizing sizeable settlement sum and policy changes proposed by the Settlement Agreement and the significant risk that drivers face in pursuing this litigation, for the reasons explained below, the Court concludes that the Settlement as a whole is not fair, adequate, and reasonable and therefore DENIES Plaintiffs' motion for preliminary approval.

II. BACKGROUND

A. Procedural History

The Settlement Agreement at issue covers two lawsuits pending before this Court. O'Connor v. Uber Technologies, Inc. was brought on behalf of all individuals who worked as Uber drivers in California.² Docket No. 330 (O'Connor Second Amended Complaint) (SAC) at ¶ 1. O'Connor alleged that Uber misclassified its drivers as independent contractors rather than employees. As employees, drivers would be entitled to the protections of the California Labor Code, including section 2802, which requires that employees be reimbursed for expenses such as gas and use of their vehicle. Id. at [**11]  ¶¶ 3, 23. Plaintiffs also contend that although Uber advertised to customers that gratuity was included in the fare and that there was no need to tip drivers, drivers did not receive the total proceeds of any such gratuity. Id. at ¶¶ 1, 20. By failing to remit the full gratuity to drivers as required by California Labor Code section 351, Plaintiffs alleged that Uber violated California's Unfair Competition Law prohibition on unlawful business  [*1114]  practices, and they sought to recover the portion of the gratuities that Uber withheld. Id. at ¶ 34. These claims, too, are predicated on drivers being employees rather than independent contractors.

Uber has argued that because it exercises minimal control over how drivers set their own hours and work schedule, its drivers cannot [**12]  be considered employees. Plaintiffs, on the other hand, contend that Uber in fact exercised considerable control and supervision over the methods and means of its drivers' provision of transportation services, making drivers employees. See id. at ¶ 21.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.