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Uber To Settle Gender And Race Unequal Pay Suit For $10M

Law360—Dave Simpson

Uber Technologies Inc. agreed Monday to pay $10 million and make changes to its systems for evaluating workers to end a proposed class action in California federal court brought by female software engineers and engineers of color who claim they haven’t been paid equally by the ride-hailing company.

The settlement, if approved, would provide about $23,800 to each of the estimated 420 engineers who were allegedly negatively impacted by a performance evaluation system in which supervisors rank their workers. Additionally, Uber would work with an outside consultant to develop a new system for promoting, evaluating and compensating workers, according to the proposed settlement.

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Ingrid Avendaño, Roxana del Toro Lopez and Ana Medina filed the suit in California superior court in October, claiming on behalf of themselves and all aggrieved employees that Uber engaged in unfair business practices and violated the California Equal Pay Act and Private Attorneys General Act.

“In this system, female employees and employees of color are systematically undervalued compared to their male and white or Asian American peers because female employees and employees of color receive, on average, lower rankings despite equal or better performance,” the original suit claimed.

In November, the suit was removed to federal court and on Monday, the same day the proposed settlement was filed, del Toro Lopez filed an amended complaint. It establishes a class for California workers and a separate class for workers nationwide, alleging violations of 10 state and federal laws or business codes.

The complaint also blamed the company’s culture, citing the high-profile blog post from former engineer Susan Fowler about sexual harassment at the company, and referencing an “unchecked, hyper-alpha culture.”

The proposed settlement does not require Uber to cop to any wrongdoing. It does require Uber, in addition to the aforementioned new evaluation system, to internally monitor base salaries, bonuses and promotions for possible adverse impacts on workers of color and women.

“The $10 million settlement plus injunctive relief with three years of monitoring is an excellent result for the class members to both compensate them for past discrimination and harassment and to reform Uber’s employment practices to prevent discrimination and hast in the future, and help ensure that software engineers are treated in a truly meritocratic, fair way going forward,” the workers' attorney Jahan C. Sagafi told Law360 in an email.

A mentor will be made available for every class member, and all new hires will receive check-ins about three months after they start to address any skill gaps that have been identified, according to the proposed settlement.

“Every member of Uber’s executive leadership team will participate in a twice-annual business review with Uber’s CEO relating to the organization’s diversity representation, pipeline, diversity growth process, and actions taken to increase the representation of women and of persons of color,” the proposed settlement says.

Of the $10 million proposed in the settlement, $50,000 would be a PAGA allocation, while named plaintiffs del Toro Lopez and Medina would pull $50,000 and $30,000, respectively. Settlement administration is expected to cost $110,000, and attorneys are requesting up to 30 percent of the settlement with costs of up to $170,000.

“The $10,000,000 settlement is a reasonable value in light of total potential damages, calculated by plaintiffs to be $46.9 million, excluding liquidated damages and compensatory and punitive damages for potential sexual harassment and hostile work environment claims,” the proposal says.

The settlement amounts to 19 times as much as the workers could have expected to recover under the maximum penalties for PAGA violations, the proposed settlement claims.

U.S. District Judge Yvonne Gonzalez Rogers is scheduled to hear the matter on May 1.

The workers are represented by Jahan C. Sagafi of Outten & Golden LLP.

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The case is Del Toro Lopez v. Uber Technologies Inc., case number 4:17-cv-06255, in the U.S. District Court for the Northern District of California.

--Editing by Breda Lund.

Update: This story has been updated to include comment from the workers' attorney.