A West Palm Beach lawyer wasn’t satisfied when he heard major labor litigation with Uber Technologies Inc. ended last month with a proposed $100 million settlement.
The settlement, which covers nearly 400,000 Uber drivers in California and Massachusetts, allows Uber to continue treating its drivers as contractors rather than employees. Gerald Richman of Richman Greer doesn’t believe that’s the right solution.
“The concept of Uber is a good concept, but the employees are not being treated fairly,” he said. “They are subject under the labor laws of the United States to benefits that they are not receiving.”
So Richman filed a lawsuit of his own in Miami federal court along with Adam Myron and Joshua Spoont of Richman Greer, Stephen Schultz of Slovak Baron Empey Murphy & Pinkney in San Diego and Thomas Schultz of LSRCF Law in Miami.
The nationwide class action claims the San Francisco-based ride-hailing service violates the Fair Labor Standards Act by not paying its drivers minimum wage or overtime.
The argument is built on the idea that Uber drivers are employees under IRS worker classification rules. The tax agency lists several factors that determine whether a company can classify its workers as independent contractors and avoid paying federal income tax, unemployment tax and Social Security and Medicare tax on their wages.
The most important factor in the IRS test is how much control the company exerts over the workers. Richman argues Uber exerts a lot of control, particularly when it comes to the money drivers make per ride.
“There’s all kinds of controls with regard to what they’re allowed to charge,” he said. “Uber is setting the prices. The drivers really have no control over that aspect of the relationship.”
Uber maintains its drivers, whom it calls partners, are independent contractors because they decide their own hours, have no set hourly wage and are free to work for competing services such as Lyft.
The California settlement will require Uber to give drivers an appeals process and more notice before they are cut, and drivers covered by the class would be able to solicit tips from riders. The settlement is awaiting approval by U.S. District Judge Edward Chen in San Francisco.
An Uber spokesman did not respond to a request for comment by deadline.
The employee-vs.-contractor debate has been raging at the state level in Florida for months. The state Department of Economic Opportunity determined in December that the state would treat Uber drivers as contractors, and a former driver’s appeal is pending in the Third District Court of Appeal in Miami.
At least 12 other state labor departments have found Uber drivers to be independent contractors.
Richmanâs case is in its infancy, filed April 22 and assigned to U.S. District Judge Jose Martinez in Miami.
The attorney doesnât necessarily have his heart set on taking the dispute to trial, but he wants to make some progress on the rights of drivers.
âWe are determined to see it through to reach a fair result,â Richman said. âIn other words, what would be wrong for the drivers is any sort of collusive settlement where lip service is paid and itâs a relatively small settlement. The fact of the matter is most cases ultimately end up settling, but the question is whether itâs a fair settlement.â
In other Uber litigation, the Miami law firm of Crabtree & Auslander filed a lawsuit Monday against the company in U.S. District Court for the Northern District of California over a booking fee that Uber drivers allegedly donât receive if a passenger goes only a short distance.
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Republished by the Law Office of Scott A. Ferris, P.A.