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Uber Settles Gender and Race Unequal Pay Suit for $10 Million

Leah Kessler

On March 27, 2018, in Del Toro Lopez v. Uber Technologies, Inc., Uber agreed to pay a $10 million settlement and make systemic changes to the way it evaluates employees to settle a class action brought by three Latina engineers, who alleged that they were paid less than their white and Asian male colleagues due to Uber’s unfair evaluative methods. The settlement will compensate about 285 women and 135 men of color for financial and emotional harm stemming from the alleged discriminatory practices.

In October 2017, Ingrid Avendaño, Roxana del Toro Lopez, and Ana Medina—all of whom are Latina women who were employed as software engineers at Uber—filed suit in California on behalf of themselves and other aggrieved employees, claiming that Uber engaged in unfair business practices and violated the California Equal Pay Act and Private Attorneys General Act. The complaint alleged that Uber uses a “stack ranking” system for evaluating employees, meaning that Uber evaluates each employee from “worst to best.” The result, as the suit claims, is that “female employees and employees of color are systematically undervalued….because [they] receive, on average, lower rankings despite equal or better performance.” These stack rankings are used, in part, to determine promotions.

This is the latest in a string of lawsuits against Uber. We have previously reported on lawsuits brought by Uber drivers concerning whether drivers’ on-call time is compensabledrivers’ arbitration agreements with Uber, and class actions challenging Uber’s classification of drivers as independent contractors. Unlike Del Toro Lopez, however, those lawsuits arose from the way in which Uber treats its drivers.

The complaint in Del Toro Lopez follows and references a high-profile blog post from a former female engineer at Uber, Susan Fowler, who commented on the sexual harassment and “unchecked, hyper-alpha culture” at the company. Fowler reported a coworker to Uber’s Human Resources department after he propositioned her for sex. HR told Fowler that this “was this man’s first offense, and that they wouldn’t feel comfortable giving him anything other than a warning and a stern talking-to.” Upper management then reached out to Fowler, telling her that she had a choice: “(i) [she] could either go and find another team and then never have to interact with this man again, or (ii) [she] could stay on the team, but…he would most likely give [her] a poor performance review when review time came around, and there was nothing they could do about that.” Moreover, one HR representative explicitly told Fowler that “it wouldn’t be retaliation if [she] received a negative review later because [she] had been ‘given an option.’” Fowler eventually left Uber for another job. Before leaving, however, she calculated the number of women still at the organization, and found that out of over 150 engineers in the site reliability engineer teams, only 3% were women—a finding that speaks to the allegations brought forth in Del Toro Lopez.

While the settlement of this particular lawsuit will provide about $23,800 to each of the estimated 420 female and minority engineers who were negatively impacted, we should not expect companies like Uber to change on their own. It is up to their workers to speak out, assert their rights, and ensure that labor and other discrimination laws are followed.

If you believe you that your employer has violated wage-and-hour laws, or that your employer has discriminated against you based on your gender or race, contact The Harman Firm, LLP.

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