(SAN FRANCISCO) –– Today, a federal judge denied preliminary approval of a proposed Lyft class-action settlement that would continue to misclassify Lyft employees in California as independent contractors. The decision comes after the Teamsters Union and Lyft drivers filed legal objections to the settlement. 

In his decision, U.S. District Judge Vince Chhabria cited strong reservations over the proposed $12.25 million settlement, stating that in assessing Lyft’s liability, the plaintiffs’ attorneys grossly undervalued the drivers’ claims, and “shortchanged” drivers by half in assessing the reimbursement claims alone.

The court sided with the Teamsters in finding that there are serious defects in the economic aspects of the settlement, which would not be made up for by the modest nonmonetary improvements that have been proposed.

While the court disapproved of the settlement without regard to employee classification, Chhabria said the Teamsters made “good arguments” that are “best directed to the legislative or executive branches” as it concerns employee classification.

In addition to filing objections with the court, the Teamsters Union and Lyft drivers have also filed a motion to intervene in the lawsuit.

“We are pleased with today’s ruling. We are hopeful that Lyft drivers will get more of the money that they deserve thanks to our objections in this case, and we proudly continue to stand with Lyft workers who have been misclassified and are seeking justice,” said Rome Aloise, Teamsters International Vice President and President of Teamsters Joint Council 7. 

“We are heartened that the Court took seriously our objections and looked closely at this settlement. We intend to continue to press for improvements for Lyft drivers and work toward securing the rights guaranteed them under California and federal law,” said Teague Paterson, attorney with Beeson, Tayer and Bodine. 

The Teamsters have filed an unfair labor practice charge with Region 20 of the National Labor Relations Board (NLRB) in San Francisco, alleging Lyft’s business practice of misclassifying drivers and its one-sided “terms of use” imposed on its drivers deprives them of rights guaranteed under federal labor law, including the right to join a union. In its decision, the Court recognized that Lyft’s arbitration provision violates the National Labor Relations Act.

The proposed settlement would have locked-in Lyft’s unfair contractual terms, including terms that deprive drivers of a voice on the job; permit Lyft’s retaliation against drivers who seek to advance their rights; and prohibit drivers from filing class-action claims against Lyft in the future.  

In the past year, hundreds of drivers at tech companies, including Facebook, Yahoo, Apple, eBay and others in Silicon Valley, have organized with Teamsters Local 853 in San Leandro, Calif. The union has negotiated strong contracts for the drivers, including good wages, benefits and workplace protections. 

The Teamsters Union is part of a growing movement of labor, faith and community-based organizations and workers challenging income inequality in Silicon Valley through an innovative partnership called Silicon Valley Rising. For more information, visit http://siliconvalleyrising.org. 

For more information on tech worker organizing with the Teamsters, visit https://teamster.org/tech-drivers-deserve-union. 

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the United States and Canada. Visit www.teamster.org for more information. Follow us on Twitter @Teamsters and “like” us on Facebook at www.facebook.com/teamsters.

 

 

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