Employment Law Blog

Saturday, April 9, 2016

$12 Million Lyft Settlement Rejected by Court Because it "Shortchanged" Drivers

A federal judge in California denied preliminary approval to a $12 million class action settlement agreement that would have resolved Lyft drivers' claims of being misclassified by the ride-share company as independent contractors because the settlement was based on an "artificially low estimate" of damages; in particular the true maximum value of the drivers' mileage reimbursement claim appeared to be double the figure on which the settlement in this California Labor Code suit was based. Just over a year ago, the court ruled that whether Lyft drivers were employees or independent contractors was for a jury to decide. Both Uber and Lyft drivers have been fighting to be treated as employees rather than independent contractors because this would mean that they could be reimbursed for expenses, wage and hour laws would apply, benefits laws would apply, and the ride-share companies would have to pay the employer share of payroll taxes, such as social security taxes.

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