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Judge won’t seal (most) info in Uber’s proposed $100M settlement of class wage suit

By Lisa Milam-Perez, J.D.

The federal judge overseeing the landmark “gig economy” class litigation filed by Uber drivers and the parties’ $100 million deal resolving the case has rejected a request to allow certain information in the proposed settlement to be filed under seal. Many of the details that the parties hoped to redact are essential to the analysis of whether the agreement as proposed passes muster, the judge noted. However, he did grant the plaintiffs’ bid to redact the number of opt-outs that it would take to trigger Uber’s option to rescind and revoke the settlement—a fact that would no doubt be of interest to litigants in the growing number of Uber driver suits being filed across the country (O’Connor v. Uber Technologies, Inc., May 6, 2016, Chen, E.).

Settlement. In April, the parties reached a tentative settlement in the high-profile case, which challenged the independent contractor status of some 165,000 Uber drivers and contended that the drivers were, in fact, employees—and thus entitled to expense reimbursement, confiscated tips, and other benefits of employment. The tentative deal has aroused more than the usual amount of interest given the considerable issues at stake in what has become the seminal test case in this uncharted “gig” economy territory—a case that asks, at its core: What is the nature of the employment relationship between the parties to these new-fangled models of generating revenue/income?

The plaintiffs moved to file under seal portions of their (still redacted) motion for preliminary approval of the proposed $100 million settlement in the case, as well as parts of the proposed settlement agreement itself, and the declaration of plaintiffs’ lead counsel, filed in support of the motion for approval. They wanted to conceal information about the total miles driven “on app” by drivers using the Uber application; the gross fares; and the service fee to Uber on those fares (from 2010 through 2016) for several categories of Uber drivers in California and Massachusetts. Much of this information was “highly material to an assessment of whether Plaintiffs“ settlement falls within the range of possible approval,” the court observed. On the other hand, Uber’s reasons for wanting to keep it under seal were “largely hypothetical.”

Damage from disclosure is speculative. For example, Uber wanted to redact information about the potential value of each plaintiff’s claim, saying that competitors could make hay with that information to determine usage trends. But the rideshare company couldn’t show “how an aggregate number of all miles driven or fares received over a period of several years could result in a determination of trends of usage, particularly when the information is not broken down by year or any other period,” the court said. Uber also claimed its competitors could make use of the mileage information revealed in the documents, but again, the company did not explain how.

“Uber has failed to provide a compelling reason for why this information should remain under seal, particularly when balanced against the public’s significant interest in this information,” the court concluded, denying the request. It also refused to redact Uber’s most recent valuation (since the information was readily available to the public anyhow, through a simple Google search).

How many opt-outs kill the deal? However, the court did grant the plaintiffs’ request to redact the number of drivers it would take to opt out of the settlement in order to trigger Uber’s right to call off the deal, and render it null and void in its entirety.