Lyft’s $27M Settlement With Drivers Nears Final OK

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By Jon Steingart

A proposed settlement agreement in which Lyft Inc. would pay $27 million to drivers who say they were deprived of compensation and benefits after being misclassified as independent contractors appears poised to receive final approval ( Cotter v. Lyft, Inc., N.D. Cal., No. 3:13-cv-04065, settlement fairness hearing 3/9/17 ).

That was the impression Shannon Liss-Riordan, an attorney for the drivers, said she took away from a March 9 hearing in which a federal judge in California weighed whether the proposal is a fair and equitable resolution. The drivers say they are entitled to overtime and expense reimbursement because they should be classified as employees.

The decision to go forward with settlement rather than proceed to trial on the question of whether drivers are Lyft employees highlights the uncertainty the current U.S. Supreme Court vacancy presents in workplace litigation like the drivers’, where arbitration clauses are an issue, Liss-Riordan told Bloomberg BNA March 10.

“The U.S. Supreme Court has been extremely nice to employers in letting them use arbitration clauses,” Liss-Riordan said. “Ultimately whether that tactic by companies continues in order to try to avoid wage laws may depend on who our next Supreme Court justice is. It’s widely believed that the current eight justices are split four to four, so the new justice is likely to be a tiebreaker.”

Several cases now before the Supreme Court test whether workers’ wage-and-hour class actions may proceed in court despite arbitration agreements in employment contracts. The workers say enforcing these agreements would violate their right under federal labor law to engage in concerted activity.

Settlement Lands Money in Pockets Now

The Senate Judiciary Committee scheduled a March 20 confirmation hearing for Neil Gorsuch, who is President Donald Trump’s nominee to fill the Supreme Court vacancy.

“In the meantime, the settlement gets $27 million into their pockets now,” Liss-Riordan said about the participating class members in the Lyft case. About 95,000 drivers submitted claims, she said. The settlement would net about $3 to $4 per hour worked for full-time drivers and $1 to $2 for others, said Liss-Riordan, who’s with Lichten & Liss-Riordan PC in Boston.

The deal “will preserve the flexibility of drivers to choose when, where and for how long they drive with Lyft, and enable consumers to continue benefiting from convenient and affordable transportation,” Lyft’s director of policy communications, Adrian Durbin, told Bloomberg BNA March 10 in an email.

An earlier version of the settlement called for a $12 million payout. Judge Vince Chhabria of the U.S. District Court for the Northern District of California rejected that as too small after concluding it fell too far short of an amount drivers might recover if they were to prevail at trial, which he estimated to be as high as $170 million.

A few dozen class members out of a potential class of 202,000 objected to or opted out of the present settlement proposal, Liss-Riordan told the court in November when she moved for final approval.

Chhabria said in a March 9 docket entry that he’ll issue a written ruling. Liss-Riordan said she expects that to come the week of March 13.

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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