Uber seeks $7.75M settlement in California labor code class action | Hacker News Reader

Uber seeks $7.75M settlement in California labor code class action

bloomberg.com

50 pointsrayuela54 comments

> Under the 2004 law, the state keeps 75 percent of any penalties won. Attorneys for employers have nicknamed it the “bounty hunter” and “sue your boss” law because of the remaining 25 percent is a reward for the workers who bring the case.

USA has strange habit of attaching money to justice. It comes up with various schemes of making money while exacting justice and gets all surprised while justice becomes way less just in the process.

In european countries fine is for punishing the offender. Victim might get some help but one is not usually directly connected to the other.

I feel that those money making schemes prevent from introducing better solutions because they work to some degree and the damage they do is not visible till later where it is already huge.

fines aren't a great way to enforce justice either in my opinion, because they incentivise finding perpetrators where there aren't any, and being heavy-handed with enforcement of the law in order to bring additional funds into the courts and police departments.

I say we just tie people up and beat them with a cucumber until they say they're sorry

Fines are good way to correct behavior because people generally hate loosing money. The problem starts only when that money is transferred to some other party that can influence the process in any way (even the victim, definitely police or lawers).

My guess as an American is that it incentivizes victims to step forward, if in a somewhat self-serving way. I wouldn't be surprised if you told an average blue collar American that you won a class action lawsuit against a former employer, of if you received a court settlement in the past against the FOO company, that they'd expect you to be quite rich, or at least to have received a large amount of dough. I suspect they would have no idea that the real winners were in fact the lawyers on both sides.

Exactly. It seem that the justice is served but it's just a side offect of money making scheme for lawyers that taxes economy and exacts undue burden on actual justice system.

For the most part, fees in civil suits are not to punish the wrongdoer (punishment is the domain of criminal law), but rather to bring about the status quo ante (how things were before the offending party screwed things up).

This is not unique to the US legal system, but actually a fairly widespread legal concept.

All law systems or the ones that come from UK law?

I was under the impression that in french or german law it's more about resolving disputes (who owes whom how much) and punishing "uncivil" but not necessarily criminal behavior (like not respecting agreement).

And yet I've seen countless people on HN, both American and European, decrying what they feel are lax civil penalties because they haven't completely bankrupted the company against which they're levied.

Those are two orthogonal questions. How big should the fines be and who should actually get the money?

Fine should be punishing for the offender and money should go to national central bank.

Well you're missing crucial information.

First of all, under paga you simply file to the lwda the grievances of the employer and they decide if they want to do the work of investigation or just hire you, at 25% when any lawyer will charge you 33-40%, to investigate for them.

Of course the defense would call it the 'sue your boss' law because it is only used when your boss breaks the law and you are forced to sue them in order to utilise the legal system to ensure compliance of the legal code.

This is a labor dispute, the entire relationship between the parties is based on money, if an employer has been stealing income of course money is going to be attached to the concept of justice.

> better solutions

Better solutions to what? Employers breaking the laws? What can you suggest? Asking that question is what created the labor code.

> the damage they do is not visible till later where it is already huge.

Can you elaborate on what you meant by this?

>> better solutions

>Better solutions to what? Employers breaking the laws? What can you suggest?

I'd suggest fining employer an amount it will feel punishing. Also sometimes additionally some people that were in charge at the time.

If the employees were harmed financially (they didn't get some money they should get as employees) the debt to them should be formally recognized. If employees were harmed in non-financial ways it could be translated to money but it should be solely on the base what was the harm and how much harm was done to them as human beings regardless of how much they earned and where they worked and on what position. They should be awarded some financial aid from the government for that (because it's the government is the one that failed to force the employer to obey the rules). This fund could be financed by fines. Most important part of the idea is that punishment relies solely on actions performed by employer and it's financial status so that it feels the punishment and compensation for harmed depends solely on non-financial damage done to employee without taking into account how rich was employer or employee.

>> the damage they do is not visible till later where it is already huge.

>Can you elaborate on what you meant by this?

You attach money to imprisoning people, it works for a while for both running the prison system and making (or saving) money while doing so. After a while you end up with disproportional population of inmates because it turned out that making jailing people profitable might have that effect in the long run.

Hospitals create bodies that make purchases of medical supplies and equipment for them to save money by buying in bulk and having stronger bargaining position. At some point someone has a brilliant money making (saving) idea that instead of paying to run those bodies from hospitals funds according to the needs it could be better if they could take a percentage of value of orders they execute. Bodies become independent, profitable, privatized. Behold, you just created incredibly powerful middle man that has incentive for the medical supplies to be as expensive as possible. After a while you notice what you've done because now you have a healthcare that's at least twice as expensive and any comparable healthcare in the world.

There are more examples like that. Civil forfeiture. Lobbying. Pretty much pick anything wrong in the US and you'll almost always find money making scheme somewhere among the causes that seemed like a good idea at a time when it was introduced.

It is a curious dichotomy that the IP story of the week awarded $500mil in damages to a Corp, and this labor story effecting "1.6mil" workers is looking to settle for $7.5mil($1.7mil flagged). Assuming the class identification to be true, you would think that a wrongly classified worker would have incurred at least $100 in negatives, even if you only totaled up potential unemployment it would be more for than this amount for that subgroup.

The gig economy is a wild alternate reality in my mind, where we travel back to a pre OSHA/DOL period in worker relations.

> The claims by Steven Price, who sought to represent as many as 1.6 million California drivers in a class action, were brought under the state’s Private Attorneys General Act

From a quick Google, the population of California is 38.8 million. I would be very surprised if 4% of the population worked for Uber.

It would make a little more sense if you think of this going back a few years.

> Uber Technologies Inc. is offering its drivers an average of about a dollar apiece to dispose of alleged labor code violations that their own lawyer said might be worth billions

Wow, now that is cheap.

Wait, what? Uber's lawyer said they were worth billions?

Can someone enlighten me, what are the full working rights in the US opposed to contractors rights?

I think we had the same issue in the UK, when uber drivers wanted to be classified as full time workers. Although they do work as contractors e.g no fixed timeschedule, money directly in their pockets them doing their own tax etc.

Most uber drivers I talked to in London mention, that they love working whenever they want without restrictions. Well that comes with the price of not being classified as fully employed (at least for now).

IANAL in the UK we have laws that protect people who are really employees but are classed as independent contractors (this also protects HMRC from bogus work arrangements to dodge tax, see IR35) if you really see Uber as offering that flexibility, that's great! If you're working 40 hours a week, every week for uber, you're an employee.

that might sound great, but what about people who want to accept the trade-off that being a contractor provides? You waive your employee rights (and take up a B2B contract instead) in exchange for receiving a much larger share of your total cost of employment.

It's not like HMRC misses out on tax under this arrangement, as the contractor's business pays employer taxes (plus any corp tax from cap gains) and the contractor pays their employee taxes.

It is to protect the majority of the people. I've seen a lot of cases in the news where people are forced to change into a contracting role.

A lot of these 'share' companies often don't do anything to inform the tax authority what work these contractors did for them, thereby making tax evasion way too easy.

If you're a contractor you really need to know what you're doing. Meaning: a lot of things you'll need to budget for because it is your responsibility. If a lot of people don't grasp that, then the problem becomes a government problem.

I'm an employee and have pretty flexible working times. I don't see why I'd ever want to be a contractor where as only benefit you have more flexible working hours. That's not a change!

I am a contractor, and I find a lot of benefit in working under this paradigm. I think the idea that the government should protect people from their own choices is quite an unpleasant one, as someone can always switch from a contractor back to an employee if they find it unsavoury.

Benefits I enjoy from contracting:

- B2B transactions mean I can retain some cash in the business for investment while paying myself a good salary.

- My performance is more important to my role because I can be easily let go - I prefer to align my interests with those of my employer in this way.

- Being a contractor also means being a consultant to an extent. I am trusted to bring in expertise to improve processes and I enjoy having a positive impact in this way.

I agree that the ongoing issue with labour exploitation with things like zero-hours contracts, forced contracting and using apprenticeships to force lower-than-minimum wages are bad, but they don't take away from the value of contracting itself. In an attempt to address labour exploitation, IR35 and other measures are also becoming major problems for legitimate contractors too.

> I think the idea that the government should protect people from their own choices is quite an unpleasant one

If the government doesn't protect people against immoral companies, who will? If an employee doesn't understand their obligations to pay extra taxes and cover their own forms of insurance, and doesn't ask for enough money up front to cover those costs, they'll go to jail and/or be bankrupt. That creates costs for taxpayers and corporations, the net loss likely higher than the cost of a bit of regulation and education.

Why not educate those employees (or ensure that they can't get stiffed for a lack of education) instead of allowing them to be funneled (or scammed) into an unproductive dead end? As a taxpayer, I'd rather see them protected and productive than unproductive and bankrupt.

I think the sticking point here is that you're talking from a viewpoint of companies pressuring employees to convert from full-time to contract. I don't know if that happens, and it's not the viewpoint I'm talking from - I don't think a company should be able to pressure an employee to do anything outside of their employment agreement and there certainly isn't legal grounds for them to be able to enforce something like that. Harming legitimate contractors in an attempt to solve this issue by proxy is illogical.

oh they do miss out on a lot of tax that's why HMRC is so hot on disguised employment - though strangely "self employed" lawyers are not caught by this even if they are working on the same case for years

working on the same case for years does not disqualify a relationship from being a B2B one - service companies do this all the time. Having a service company with 1 employee does not suddenly make that relationship invalid.

Tell that to 99.9% of IT contractors caught by ir35 and you will get a bitter laugh

I am an IT contractor, I'm well aware of this. My point is that what HMRC is doing is going after legitimate business relationships completely in spite of the problem they're trying to solve.

I'm not following this particular settlement so I'm not sure if it has to do specifically with full-time employment vs contractors, but in general the main advantages of full-time are things like paid time-off (including sick leave) and medical insurance.

https://www.dol.gov/general/topic/workhours/full-time

Contractors are one of the types of workers not covered by the NLRA, so there are a variety of protections that do not include them.

I'd also add that Uber's software contains many restrictions on how drivers must perform, how frequently and quickly they must respond, etc. It's not without restrictions just because they set their own hours.

In the UK some of them won those rights, because Uber had put a lot of pressure on them to work specific hours (not just through pricing but various forms of cajoling) so they were deemed to be employed.

  I think we had the same issue in the UK, when uber drivers wanted
  to be classified as full time workers.

Yep, the drivers won that tribunal in 2016 [1].

Courier company City Sprint also lost a case this year, where the judge described their contractual arrangements as "contorted, indecipherable and window-dressing" [2].

HMRC are investigating parcel delivery company Hermes for similarly classifying drivers as self-employed, and there's a potential case from the GMB Union (who won the case against Uber) [2] [3].

In the UK, the gig economy isn't as simple as companies insisting "you're self-employed because we say you are".

[1] https://www.theguardian.com/technology/2016/oct/28/uber-uk-t...

[2] https://www.theguardian.com/business/2017/jan/06/courier-win...

[3] https://www.theguardian.com/law/2016/oct/20/hermes-couriers-...

[4] http://www.itv.com/news/2017-01-25/hermes-gmb-taking-legal-a...

Love the lying headlines.

The title says: "Uber Offers Drivers $1 Each to Wipe Away Labor Threats Valued in Billions"

The article says: "The agreement calls for about $1.7 million to paid to drivers(...) The amount each driver gets depends on how many weeks they have actively driven for Uber."

Regardless, it sounds like a joke. Unless they plan to somehow disqualify 99% of the drivers, the amount will still pretty much average into a slap in the face for a drivers.

Also, as I understand the article: the settlement is for $7.75M. "The agreement calls for about $1.7 million to paid to drivers and earmarks about $2.9 million in PAGA penalties for California’s Labor and Workforce Development Agency, with the rest of the settlement sum going toward attorney fees and administration costs." Which would mean that $3.15M will go to the lawyers.

I guess the lawyers are the only party that benefits from lawsuits these days.

Has it ever been different? What we don't hear from sharks - fish are friends.

--"Love they lying headlines...."The agreement calls for about $1.7 million to paid to drivers"

So they were off, by what, a penny? It's $1.7 million after all. Slice and dice it all you want...

They don't offer $1 each, they offer $1.7M to be split according to some criterion correlated with the number of "weeks they have actively driven for Uber".

OK, I got it. But how much can the top person get? Maybe the company doing the math /sending checks takes $1.5 million.

In short, it's a scam, like most lawsuit settlements. The lawyers get rich, the state gets some fines and the company admits no wrongdoing and does it again and again.

I was picking on inaccurate headline. I hate inaccurate headlines - most people don't read all articles and thus end up believing nonsense when a headline is invalidated by its article.

RE this settlement being a scam - yeah, I feel the same way.

Though I agree with your point I suspect Uber's driver numbers to be "inflated". Not in the literal sense of the word but in the Silicon Valley Venture Capital sense of the word.

Employee rights and labor laws are the main cause of unemployment everywhere, and of many related bad economic consequences.

The lack of them is the leading cause of economic inequality and poor treatment of workers everywhere.

Are you seriously advocating for the return to employer abuses/neglect?

https://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fi...

Simple common law practices should have been sufficient, after that incident, to force all companies into giving better escape conditions to its employees. Legislation was certainly the worse solution in this case.

Remember that these mighty legislators didn't prevent these deaths also, they only acted after the fact.

That link you just posted has nothing to do with monetary payments, you know that.

If you dislike the CLT and whatever happens with labour laws in Brazil right now I'm completely open to hear you about a reform but don't talk out of your ass like all labour laws are problematic, they are the core foundation on removing employer abuse as almost any employer is in a much more powerful standing than any single employee.

Stop being a Brazilian advocating for liberalism because you like to use the US as a role model... I know too many of you back there and most are completely ignorant to the problems that arises from that, you don't have a clue what you are talking about.

I don't like to use the US as a role model, why do you think that? Also, how do you know I am a brazilian?

I could spend a lot of time here elaborating a reform proposal, but that would be pointless, right? You don't have the power to do the reform even if you get convinced.

It is better to just come here and state the obvious, hoping that other commenters may be interested in learning some basic economics -- not of Keynes variety, which is a separate discipline -- and accept that labour laws are mostly bad.

After we get more people convinced of it we can elaborate a politically feasible reform.

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