Uber proposed its settlement in a California state court. If approved, it would potentially allow the ride-hailing service to avoid a more substantial penalty in federal court.
The complaint claims that Uber violated labor law by classifying drivers as independent contractors and not offering them certain benefits required for employees. Uber’s proposed settlement offers $7.75 million, but the majority of those funds would not go to California’s 1.6 million drivers, according to the report.
U.S. District Judge Edward Chen, who is hearing the federal lawsuit, previously said the drivers’ claims in the case could amount to as much as $1 billion, according to Bloomberg.
Clarification: An earlier version of this story was not clear on which court case, state or federal, Judge Edward Chen is hearing.