SCOTUS Ruling: End of the Road for Interstate Transportation Entitles as Arbitration Exemption Applies To All Employment Relationships, Including Independent Contractors

On January 15, 2019, the Supreme Court of the United States of America (“SCOTUS”) ruled on 1/15/19, in a unanimous 8-0 decision, that federal courts cannot force interstate transportation workers, whether classified as employees or independent contactors into arbitration. (See New Prime Inc. v. Oliveira). The Federal Arbitration Act (“FAA”), passed in 1925, enshrined in law a strong pro-arbitration policy. Pursuant to the FAA’s requirements, federal and state courts regularly enforce arbitration agreements. But as described below, there are exceptions. Several recently decided SCOTUS cases interpret the FAA very broadly and have enforced arbitration agreements, including in the employment context. (See Epic Systems Corp. v. Lewis) However, Section 1 of the FAA excludes “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce,” which the Court previously ruled to include “contracts of employment of transportation workers.”  See 9 U.S.C. § 1; Circuit City Stores v. Adams. Prior to New Prime Inc. v. Oliveira, lower courts interpreted the Section 1 exemption to apply only to employees and not to independent contractors. 

Dominic Oliveira, a truck driver brought a class action suit against New Prime alleging that the company failed to pay him minimum wage for all hours worked. Oliveira brought the suit in federal court despite a provision in his independent contractor agreement with New Prime in which the parties agreed to arbitrate their disputes. Oliveira argued that the FAA’s exemption for “contracts of employment” for interstate transportation workers refers to all contracts to do work with employees, including those signed by independent contractors. The term “contracts of employment” was interpreted by SCOTUS according the arguments made by counsel for Oliveira, which was based upon the meaning of the words from the time of the FAA’s passage in 1925. In other words, counsel for Oliveira argued that the Court must interpret the statutory language based on what the words meant at the time the statute was passed. In 1925, when the FAA was enacted, “contracts of employment” referred generally to all agreements to perform work and included both employment agreements and independent contractor agreements. Because labor strife in the 1920s served as partial motivation for passage of the FAA, and because both employees and independent contractors can cause labor strife, it was argued that it would make no sense for them to be treated differently.

The SCOTUS decision was decided unanimously in workers’ favor. On the first issue, the Court ruled that a judge, rather than an arbitrator, should decide the applicability of the Section 1 exemption. In doing so, Justice Neil Gorsuch (writing for the majority) rejected the employer’s delegation clause argument, and instead cited the fact that Sections 3 and 4 of the FAA—which in part require a court to stay litigation and compel arbitration—are limited by the exceptions defined in Section 1 of the FAA. Thus, Justice Gorsuch reasoned that a court should decide whether the Section 1 exclusion applies before ordering arbitration. Justice Gorsuch explained that, in order to invoke its statutory powers under Sections 3 and 4 to stay litigation and compel arbitration, a court must first know whether the contract itself falls within or beyond the boundaries of Sections 1 and 2.

On the second and more critical issue, SCOTUS ruled that the term “contracts of employment” pertains to contracts with employees AND independent contractors.  In reaching this conclusion, Justice Gorsuch explained that then the FAA was enacted in 1925, a “contract of employment” meant nothing more than an agreement to perform work.  So, at the time, the common understanding of the Section 1 exemption meant that Section 1 applied to both agreements between employers and employees as well as agreements for independent contractors to perform work. Justice Gorsuch reinforced his decision by looking at dictionaries from the relevant time period and comparing the word “employment” as a synonym for “work;” with all work being treated as employment. Further, the Court looked at legal authorities from the time period and saw no evidence that a “contract of employment” strictly meant that an employer-employee relationship was formed. 

SCOTUS’s decision to hold that “contracts of employment” in Section 1 of the FAA include independent contractor agreements, transportation employers will now find that the arbitration agreements and class action waivers they signed with their independent contractors are mostly likely to be considered invalid. Further, some state courts applying state law have refused to uphold certain arbitration provisions, such as class action waivers, on unconscionability grounds. This means that a wave of class and collective actions can threatening to overwhelm transportation entities engaged in interstate commerce.

Arbitration is a means to permit disputes to be resolved with less litigation expense. SCOTUS’s ruling will likely raise legal and operational costs for transportation companies. These companies may be forced to pass on the higher costs to consumers who depend on interstate trucking/transportation for the delivery of commercial goods. This decision is a victory for transportation workers’, but if the costs of the goods being transported are increased due to the increased costs of litigation, it will be the public that pays the ultimate costs.

Time for Companies to Utilize the Outside General Counsel.

The concept behind “general counsel outsourcing” is that a business organization may not need to hire a full time in-house lawyer to perform the services and functions performed by a general counsel. Some business organizations may be able to contract outside the organization, resulting in improved efficiencies and profit.

The concept of outsourcing certain business and services functions is not new. It has been used for years. For example, most companies do not maintain their own payroll function, they outsource it – there are specialists outside contractors who can manage the function more cost-effectively. For the same reason, many companies outsource most non-strategic functions – the annual report preparation; staff recruitment; insurance; public relations; advertising; internal audit; staff training; and information services.

Outsourcing of legal counsel has become a major response to the profit pressures on many businesses. In the past, companies have outsourced mostly functions considered non-strategic to the company, such as some of those listed above. However, due to increased pressures on profits and accountability issues with respect to corporate governance, regulatory compliance and risk management, there is a trend towards outsourcing “strategic” functions of business organizations, such as the general counsel.

The concept goes beyond the legal realm and also into the operational realm of a business as well. It involves the belief that services and functions typically performed by someone in upper level management should be performed by a general counsel and such functions includes legal analysis of business decisions, planning and other input that needs to go into the strategic planning process. Legal counsel along with the operational planning and review process can be outsourced to a lawyer who understands the company’s business and culture who, in essence, becomes a part-time extension of the company’s senior management team.

Most companies recognize that they need legal resources at a senior level to perform this strategic legal function to ensure that the company’s major assets and rights are suitably protected and its major exposures and obligations are suitably managed. In practical terms, this involves an on-going legal risk and opportunities audit, and an ongoing legal compliance program. Small to middle market companies must make tough decisions when addressing such strategic legal resources. Such companies are constantly seeking ways to obtain the strategic legal resources that their business requires while at the same time trying to save money and increase efficiency. Many such companies find that traditional methods of retaining counsel are not cost effective because traditional law firm overhead costs, for office space and support staff, limit a firm’s flexibility in fee-setting. When outside counsel fees climb, emerging companies consider hiring an inside counsel as an employee. With all the benefits that employee status entails, hiring someone to be an inside counsel can also be costly; such companies simply may not have the justification or the resources to hire a full-time in-house general counsel.

Outsourced general counsel services offer an attractive option to many companies. For a specified and agreed upon monthly fee, the company contracts with an experienced and well qualified attorney to provide strategic in-house counsel legal services. The outsourced general counsel is an independent contractor, not an employee. He or she may periodically work at the company’s site in order to provide the same high quality, high level of service of law firms or employee counsel. The outsourced general counsel becomes an extension of the company’s senior management team.

In no event, should any company buy the idea that the outsourcing of general counsel legal services decision is an all or nothing choice. Certainly, some legal services are best delivered externally, from law firms that offer specialized legal services. However, other legal services such as certain employment law and labor issues, legal day-to-day corporate governance issues and strategic functions, can be performed effectively by the company with the help of an outsourced general counsel who understands the company’s business.

As in most things, it is a matter of balance and the result of informed and objective analyses. The key issue of determining whether outsourced general counsel services are proper for a company is a question of balancing the delivery of the company’s needs for such services to ensure an ultimate advantage for the company against the cost of an outsourced general counsel. 

Most companies who I represent have addressed this question would agree with many of the following:

• the ability to operate at a senior level in the company’s organization;
• a close understanding of the company’s policies, strategies and objectives;
• a close understanding of the company’s operating methods, processes, products, suppliers and customers;
• the ability to manage legal risk, to analyze the company’s strategies and in order to identify legal issues, and to develop plans and programs to manage and, if possible, to avoid legal problems that arise;
• the timely delivery of work of high technical quality that also provides practical solutions which meet the company’s business goals;
• the ability to work closely and co-operatively with company personnel, suppliers and customers as may be required;
• the ability to add value to the company whether this is by saving money, avoiding losses, solving problems, achieving their business objectives, by using knowledge and skills to improve the way the company manages its legal risks and pursues its legal rights and opportunities; and
• the ability to manage external legal services for extraordinary legal issues that arise (e.g., litigation; public/private securities offerings; bankruptcy) in a cost-effective way that achieves optimum benefits for the company

Almost by definition, these qualities can only be performed by someone inside the company, who has absorbed the company’s culture and become part of the way the company does business. An outsourced general counsel can provide this level of service and resources for the company.

We have done this many times in the past and fortunately with great success for the companies we have and continue to represent. It is an alternative to hourly billing. It is an alternative to the lawyer as the enemy. It gives you a reason to call your lawyer without fear of being charged for every 6 minutes of time. Most of all, it give the business and its owners peace of mind that the company is in good hands.

Time for the Public to see Uber for What they Really Are.....and to go elsewhere

Uber’s global pattern of driver mistreatment, corporate bullying and legal transgressions should be tolerated no more.  For years, Uber managed to conceal its bad behavior with expensive P.R. campaigns and by claiming they are a technology company and not a transportation provider. Their games may have worked for a while, but their grand plan is quickly unraveling.

Uber is convenient and fast in New York City. The combination of cashless transactions and location technology make for a great service. But no amount of convenience can cover up the toxic culture that has taken hold at Uber. This hold true now not only in the treatment of its huge driver workforce, but at the company’s headquarters as well. Uber’s CEO has finally been forced to resign, but this is simply not enough.

We all know by now that Uber’s wrongdoing does not end at the door of its corporate headquarters. Just as evil is Uber’s model of “employment”. In my opinion, under New York law, Uber is an employer, but offers no employee benefits to its drivers and does not pay the taxing and regulatory costs associated with employing persons. In the vast majority of cases, Uber drivers are offered low pay, no sick pay, no vacations, no 401K. In return, they are promised “flexibility”, or the freedom to work whatever hours suit them. In practice, many Uber drivers are working long, long shifts for extremely poor pay in order to try to make ends meet. On the other hand, Uber continues to operate outside of the law with impunity.

Politicians are yet to condemn Uber. Perhaps their political contributions are just too large to refuse. I am at the point where I refuse to believe politicians will intervene and Uber is surely not going to change its business model on its own volition. But not using the app will surely send them a clear message. The consuming public needs to use its power as customers to force Uber to change their behavior. The workforce of drivers need to stand up to Uber and say “no more”, by disaffiliating with them and refusing to accept their dispatches.

 While Uber is convenient and fast in New York City due to their combination of cashless transactions and location technology, there are plenty of other car services in New York City that do the same exact thing. The only difference is that Uber operates outside of the law, while the car services that provide the same type of service in New York City have been in business for decades and know who to operate a transportation business. The consuming public and the drivers affiliated with Uber should use their collective power and go elsewhere. Uber is not going to change on its own, but you do have the power to “vote” by not using their service. Uber is no longer the sexy newcomer with a cool service. It is a lawless entity that uses drivers like slaves and laughs at the consuming public along the way. Why should anyone put up with this type of service. The time has come for the public to consider that Uber did force many of the incumbents in the industry in New York City to revolutionize and create their own technology to meet the demands of the public. It is now time to go back to these companies and use their service. You deserve better

Uber is Creating a Jobless Future

Professional car service and taxicab drivers are fighting for survival in New York City in a new economy which is trying to replace them with other means of transporting customers.  New business models like those of Uber and Lyft are threatening drivers and customers alike. Car service and taxicab drivers are joining a long list of people replaced by new technologies: grocery-store clerks, dockworkers, retail employees (especially from book, music, and video stores), etc.  As the twenty-first century proceeds, it is replacing jobs with apps. This is a new lower-wage and even jobless model of business.  There are three problems at work, which are creating a new jobless economy, and are associated with, respectively, the business models of Uber along with the likes of Wal-Mart, and Amazon.

The Uber Problem

The first problem with our "new economy" is the Uberization of the work force and the business model of replacing well-paid, full-time, professional workers with low paid amateurs. While Uber drivers bring in somewhat more revenue per hour for short shifts than do cab drivers (who make much more money per hour for long shifts than for short ones), they are also entirely self-financing (car, gas, insurance, maintenance, etc.), unlike most cab drivers (who depend on their companies to provide some or all of their operating costs).  Such jobs are often intended by car-owners to supplement other income, or while looking for a better job, rather than (as for most cab drivers) serving as a long-term profession.  The Uber model of transportation has been deconstructing the regulatory environment designed to keep us safe, allowing drivers to work without undergoing local police investigation (generally required in most places for cab-driving licenses).  They also drive cars that are not inspected by any authority, in contrast to expensively inspected taxicabs.  Uber drivers have been involved in many physical and sexual on passengers and bystanders and the is creating an ugly reality that existing regulations have not helped to prevent.

Unfortunately the dangers posed by Uber to our communities are not limited to the immediate physical dangers posed by improperly licensed and unvetted drivers, operating uninspected vehicles, and with no regulatory intervention in the employment of potentially dangerous individuals (with criminal backgrounds, or with high accident rates).  Uber is also teaching passengers that any idiot with a car can replace a professional driver operating an expensively fitted, inspected, and insured vehicle.  Uber is teaching us to disrespect professional means of income-earning, and to prefer a cheap but dangerous alternative.  Uber is teaching us to prefer a less effective and less prosperous economy, and offers us discounted car rides in return for our safety, our jobs, and our souls.  As the Uber model passes (as it ultimately will) to cargo transport and other business sectors, our economy will replace more full-time jobs with low-pay, part-time work.  Wealth will be created for the designers of Uber, Lyft, and other services.  But such services are also transforming middle-class jobs of the 20th century into lower-class jobs of the 21st century.  Uberization is diminishing jobs as drivers themselves make less money and consume less, driving demand and production down as well.

Uber is not alone, nor is it the first manifestation of this problem.  From the 1950s through the 1980s, store clerks and cashiers earned income levels closer to the middle class.  Such workers had to memorize many prices and categories of products, and operate complicated registers.  They required training and experience to do their jobs properly; and could only be fired at the expense of the investment in training a new employee.  However, the development of bar-codes and scanners enabled grocery and retail stores to hire lower-paid workers, and to deploy new workers with little training and experience (enabling bosses to replace more easily those wanting raises or organizing for benefits).  A career profession became merely an entry-level job for adolescents; and a job capable of supporting a small family became a minimum-wage job pushing the professional into looking for work elsewhere.

A similar phenomenon took place in the 1960s, when factory farming began replacing family farming.  Factory farms employ low-wage workers with little to no experience (often illegal immigrants and young children) and provide consumers with cheap food that also pushed family farm workers into seeking work elsewhere (perhaps becoming grocery-store clerks, or cab drivers).  While few would argue that high food prices are good for a population, the path from that step led to the replacement of other middle-class professions with part-time and/or lower-class pay rates, such as our retail workers and cab drivers.  Uber is merely the latest nail in the coffin of the middle-class worker, a coffin we have been building since the middle class first expanded so successfully in the middle of the last century.

The Wal-Mart Problem

Another effect impacting our economy is its growing Walmartization.  Wal-Mart has sought to provide low-cost products to consumers by encouraging American manufacturers to push manufacturing jobs to overseas locations.  In order to gain customers, Wal-Mart has deliberately deconstructed the American middle class by shipping overseas the jobs on which we depend.  Consumers giving their money to Wal-Mart pay for the privilege of exporting and eliminating our jobs, our economic security, our union rights, our tax revenues, and our social services.

As with Uber, Wal-Mart is of course not acting alone.  Since the 1990s NAFTA has helped to globalize American manufacturing.  And the US has been bleeding manufacturing jobs for decades, as foreign nations have seen increases in educational levels, technical familiarity, physical health, and political stability; while also remaining below US rates of income (all things encouraging ever more investment in new overseas plant capital).  However, Wal-Mart developed a specifically targeted plan for pushing manufacturing overseas, and at the same time kept its own workers at low wages (forcing many to seek government-funded welfare and social support). The company has not only exported middle-class American jobs; but also maintains pressure on the labor market to keep wages at or below poverty levels.  The company’s workers become absolutely dependent on companies like Wal-Mart for their cheap food and products, the only products they can then afford.  Wal-Mart cooperates with Uber and other sectors in deprofessionalizing the labor market (by continuing to push retail wages lower), and in depressing wages and income.  Wal-Mart has been steadily converting the middle class into the lower class (driving down consumption and demand and production); and the working class into the unemployed.

The Amazon Problem

The final effect driving us toward universal unemployment is the Amazonification of business; and the related automation of all work areas.  Amazon has amassed an enormous financial empire by replacing “brick and mortar” businesses with instantaneous touch-screen or keyboard shopping by computer, phone, or tablet.  In the process, the "Amazon Effect" has put out of business bookstores (including major chains like Borders), record stores (also killed by iTunes and other music-sharing technologies), and video stores (with an even more forceful shove by businesses like Netflix).  These impacts have hurt large companies and family-owned businesses alike; and they have killed off more jobs than the growing empires of Amazon and other such companies have created.  Amazon’s deconstruction of “brick and mortar” retail operations did not merely (like Uber) push middle-class jobs into the lower class; or (like Wal-Mart) push middle-class jobs overseas.  Instead, the jobs lost to the Amazon business model (and to data services that replace stores providing books, music, and video) are lost completely, and forever.  For example, Netflix has effectively replaced video stores across the nation; and yet it currently employs approximately 4000 people.

Some businesses have survived the scorched earth left by the “Amazon effect” by emulating the workerless e-commerce model (like Barnes and Noble, which while still maintaining physical book-stores sells a great deal of its merchandise through its automated online ordering system).  Other businesses have survived by becoming tributary fiefdoms of the Amazon empire, selling their products through Amazon’s order processing service (which provides small businesses with a potentially global clientele).  But the failure of 20th century, labor-intensive retail to compete with 21st century, information-intensive business models tells the full story.  Even though some businesses have held on by bowing to the inevitable, the inevitable has killed far more business opportunities and actual jobs than it has created.  Those opportunities created on the information super-highway have largely been monopolized by a few powerful corporations like Amazon, Netflix, Apple, etc.

As with Uber and Wal-Mart, Amazon did not create this phenomenon, but jammed its foot down on the accelerator of the process already underway. The “Amazon effect” are the results of automation and the improvement of technology and software.  Grocery stores also automate and eliminate jobs by using self-checkout lanes (enabling a smaller work force to manage larger numbers of customers and products).  Apps replace workers and specialists.  Expensive and expanding technologies are going to increase also the number and diversity of jobs lost to automation and applications, including many previously seen as “untouchable” (requiring too much dexterity, skill, creativity or intuition, etc.; all of which are now being surpassed by better technologies and software).

In the next decade, self-driving cars are going to replace many of today’s cars.  The self-driving car will launch the next work-force revolution.  Customers frustrated by sketchy and unstable Uber drivers (who by then will have out-priced cab drivers into obsolescence) will enjoy new services which simply send them self-driving car-bots.  Owners of self-driving cars will realize that having their car sitting in the driveway, or in the parking lot at work, is a lost opportunity to have the car make money.  New apps will enable owners of such cars to release their cars to leasing services until they need them back.  Fewer and fewer people will own (and buy) cars, as it becomes easier and cheaper to simply share cars through such systems.  And fewer people will make them.  Soon, no one will be driving cars for a living.  

Into the Jobless Economy We Go!
These three effects are combining to create the new, jobless economy of the 21st century.  Uberization and related effects are helping to deconstruct middle-class incomes and our respect for middle-class professions.  Walmartization is transferring ever more jobs overseas, and maintaining ever more poor people on low-level incomes that force their dependence on government assistance.  Amazonification and automation are reducing and eliminating the work force entirely, insulating wealth from the need to employ people at all.  These effects are progressively transforming capitalism from a labor-intensive means of generating wealth (which “shares” at least a portion of the wealth with the working classes responsible for actually creating it) into an information-intensive model no longer requiring workers.  

The jobless economy also inhibits the formation of small businesses by those without inherited or pre-established wealth.  Small businesses cannot compete on the information superhighway with major corporations able to make and exploit new applications and technologies (and economies of scale) which push their operating costs below those of local businesses.  Local businesses are dependent on many other large businesses to move outside and attract global clientele.  As the century progresses, both work and entrepreneurial opportunities are going to be increasingly monopolized at the top, and are going to be increasingly absent at the middle and bottom.

Ultimately, there are three places these effects can lead us.  The first is the realization that, if people are not going to have either work or business opportunities available to them, then the state is just going to have to provide them with food, clothing, housing, medical care, etc.  This will create the nightmare: the total welfare state.  An uglier option is a dystopian future of mass hunger, disease, suffering, and death. Finally, a third path takes us through violent revolution by the hungry masses; although that option will likely still lead to one or the other of the first two (welfare state, or dystopia of hunger and death).  Are you ready to explore these exciting new vistas?   Then, hop into an Uber car and enjoy the ride!

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Uber will pay $100 million to settle the biggest legal threat to its business, but are Drivers or Uber the real winner?????

It is crying shame to have settled this case. I am sure fighting Uber is a hard and arduous undertaking, but once you take case, a lawyer is supposed to do what is in the client's best interest and not their own....and certainly not where the opponent (Uber) makes out better than all of the parties. It is as if this settlement was a clear victory for Uber.

As we know, Uber has spent the last two and a half years embroiled in a major legal battle over its business model. The company considers its drivers to be independent contractors, but many of those drivers believe they were treated more like employees. Paying up to $100 million to settle class action lawsuits in California and Massachusetts removes the biggest threat to Uber's Business model. Drivers in those states will remain independent contractors rather than becoming employees. So who wins in all of this????? Certainly not the drivers. The small amount of money they will each receive will perhaps reimburse them for some of their past costs for gas and car maintenance, but Uber is not going to be paying any of these items to drivers in the future. The drivers get a bit more protection by having less stringent rules before Uber can deactivate a driver and drivers are allowed to ask for tips from passengers. BIG DEAL......This is a settlement that is fair to drivers? NO WAY. NOT IN MY BOOK. 

Uber get to keep its business prized model and gets to claim vindication by continuing business as usual. 100 Million to them is peanuts. So we know that Uber benefits the most, but who also benefits....the lawyers for the drivers. Class action cases of this nature are supposed to be about vindicating the rights of the drivers, but for the plaintiffs attorneys it has proven to be clearly about a big payday and mega buck. Yes, they worked extremely hard over the past 2.5 years, but in the end they will get about $25-$30 Million dollars in legal fees from this case. This is a huge incentive for them to settle and the impetus to convenience their clients (the drivers) that the settlement will give them more rights and will vindicate their interests.

I have the utmost respect for the plaintiffs’ attorneys as they took a case and financed it all the way, but I believe they had a great case and would have won. I have been litigating cases involving the issue of employer-employee relationship in almost every forum in New York for the past 20 years and this is one of the most clear cut cases of employer employee relationship I have ever seen. So why settle, especially before the plaintiffs’ attorney even had the chance to make a motion for summary judgment asking the court to declare Uber's drivers to be employees as a matter of law? The answer is that the plaintiffs’ attorneys worked hard, paid money from their own pockets to litigate the case and they wanted to get paid.....and now they will....BUT the real issue of whether Uber's drivers are employees or independent contractors will remain unsettled. 

In the interim, Uber, which doesn't really make money at all, will continue to save as much as 30% or so on labor costs, because independent contractors aren’t entitled to the same safety nets as traditional employees—i.e., benefits such as health insurance and minimum wage protection. They’re also responsible for paying their own business expenses. For Uber drivers, these include gas and car maintenance, which really add up.

What a shame for the drivers, because they really don't get anything here.....and what a shame for the legal profession because now it is just another case where the lawyers settle because money has that kind of effect on people. This degrades the legal profession....and kind of makes me ashamed to be a part of it. A lawyer is supposed to zealously represent the interests of their client (not their own interests). I apologize in advance too the attorneys for the drivers, but this case has turned into just another case to make money. It turns out that it was not about vindicating the rights of drivers. Each driver really did not have much to lose by continuing to litigate the case, but the plaintiffs attorneys had about $25-$30 Million dollars in legal fees to lose. This appears to be simply too much for them to risk. The drivers didn't  have much to risk by continuing. In the end, for the drivers who drove the most, around 10,000 drivers, they will receive around $8,000. For the rest, the more than 122,000 drivers who have driven less than 750 miles, they should expect an average of $24. This is a pathetic settlement that the drivers should reject as it is their case and they should demand more.

Sometimes you have to take a risk and sometimes that risk means taking a case all the way and get a decision. Yes, it would have been a big gamble for the plaintiffs attorneys and they did a great job thus far, but I felt so strongly about this case that if asked, I would have worked with them for free. After 20 years of practicing law, I still believe in justice...and in this case, justice was not served. Uber continues to operate with impunity, their business model survives and the drivers go on as usual, getting treated like cattle, when in fact they are as close to an employee of Uber as any case could possibly expose. Again, Uber wins, the lawyers win and the driver, who are the represented parties, get nothing in the long run. 

The settlement represents a huge win for Uber. If the lawsuit had gone to trial, and a jury decided that drivers indeed deserved to be full employees, then Uber could have suddenly found itself responsible for all sorts of extra costs, from Social Security payments to minimum wage requirements. Instead, drivers will stay "independent", and Uber keeps its costs low. Don't be surprised if you don't see any Uber drivers celebrating in the streets as a result of this settlement. Many were hoping for a much different outcome.

I believe it is obvious that the plaintiffs/drivers who wanted to be employees are going to be disappointed and they should be. Although the lawsuit was settled, for the drivers, Uber really won this case.

But drivers could end up eventually coming out on top, depending on whether the settlement is approved by US District Court Judge Edward Chen, and everything he has said up until this point seems to suggest that he was looking forward to a jury trial. The plaintiffs in Uber's case were seeking $3.4 billion, a fairly ridiculous sum but one they thought they were owed. Judge Chen could decide that $100 million isn't enough compensation, or that the reforms Uber is promising more transparency, an ability for drivers to solicit tips and challenge deactivations through arbitration, recognition from Uber of quasi-union "driver associations" don't even scratch the surface.

Another potential poise result from this settlement is that without any jurisprudence on the most critical issue of employer-employee relationship, there is nothing preventing others from championing the cause in the future. The case would be settled and not decided. Until a court decides whether Uber drivers are employees or independent contractors, the debate will not end. I guess a new set of plaintiffs in other states will have to hope for a lawyer that is willing to take the risk of taking this type of case to trial and consider more than their own self interests in being compensated for their efforts rather than the cause they were supposed to be seeking, which is justice.