LOS ANGELES — A California federal judge recently struck down intervention by a teamsters union looking to block a proposed settlement between attorneys for Lyft and a group of current and former drivers for the ride sharing company. The Uber Lyft Teamsters Ride Share Alliance (ULTRA), argued the settlement could ultimately disenfranchise thousands of potential plaintiffs by limiting future legal claims against on of the largest ridesharing companies in the country.
In their lawsuit, the plaintiffs alleged the defendant intentionally misclassified its drivers as independent contractors in order to avoid paying overtime, reimbursing drivers for work expenses, and even paying minimum wage. The proposed settlement would end up covering thousands of drivers in the state, depending on how many individuals agree to opt into the settlement and recover compensation.
Attorneys for the teamsters argued the proposed settlement would not go far enough to compensate drivers who spent more than 30 hours per week while compensating employees too much who worked fewer hours. The settlement, as written, would give drivers who worked 30 hours or more would receive double the compensation compared to those who work fewer than 30 hours.
Furthermore, the settlement would essentially forced all other similarly affected drivers to waive all their rights to future claims in exchange for compensation through the claim. ULTRA argued the Fair Labor Standards Act requires claimants to affirmatively opt into the claim to waive their rights, but this particular settlement would not require such actions.
Drivers who worked more than 2,000 hours since May 2012 would receive payments of approximately $11,000 from the proposed $27 million settlement, but with the caveat they and others will not be recognized as employees are receive employment benefits.
According to reports, approximately 81,000 claimants have opted into the proposed settlement thus far. That number represents about half of the potential claimants throughout the state of California. While the District Court judge hearing the case dismissed ULTRA’s arguments against the settlement, the matter has not been approved thus far.
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