In a suit relating to wages, employee classification and sick leave, a federal court in California preliminarily approved an $8.43 million settlement for 1,322 drivers for the company in the state who opted out of Uber’s arbitration clause.

BloombergLaw reported that the proposed $8.4 million deal reached between Uber Technologies Inc. and more than 1,300 California drivers, who alleged they were misclassified as contractors, would end one of the gig economy court battles that predate the passage of Proposition 22.

The settlement award would go to about 1,322 drivers who opted out of arbitration agreements and worked for the company between Feb. 28, 2019, and Dec. 17, 2020, according to a motion for preliminary approval filed on Thursday. The December date reflects the enactment of Prop. 22, a ballot initiative that Uber helped to fund to cement app-based drivers as independent contractors.

Uber and the drivers agreed to dismiss the case in November after signaling they had reached an agreement. The deal is slated for a final approval hearing before the U.S. District Court for the Northern District of California in June. It would follow a $20 million settlement approved by the same court in 2019 between Uber and 15,000 California and Massachusetts drivers.

This class action lawsuit, seeking to represent nearly 5,000 Uber drivers, was launched in April of 2020. The plaintiffs allege that the rideshare giant improperly classifies them and others, depriving its drivers of important benefits, including minimum wage, overtime, and sick leave. The complaint also charged Uber with failing to provide properly itemized pay statements and reimburse drivers for business expenses, such as gas and insurance.

In a Jan. 26 order, the court agreed to grant certification of the proposed Class for itemized wage statements and expense reimbursement; however, U.S. District Judge Edward M. Chen trimmed claims for minimum wage, overtime, and sick leave pay.

Explaining that claims for minimum wages, overtime, and sick pay would all hinge on individual evaluations of each Class Member’s claim, Chen dismissed those class action allegations. Judge Chen also addressed Proposition 22, a new voter-enacted California law that applies only to rideshare drivers.

The settlement doesn’t answer the question of whether Uber drivers are employees entitled to benefits such as overtime, minimum wage, and business expenses – an issue that continues to be debated despite Prop. 22, which was struck down by a state judge as unconstitutional. A California appellate court is weighing that challenge. Drivers wrote in a motion for preliminary approval filed Feb. 17 that, while the settlement doesn’t answer the question of whether they were misclassified, but that it will provide them “significant value.”

Of the $8.4 million proposed settlement, administration costs totaled $29,000; requested attorneys’ fees represent a quarter or $2.1 million; and each named plaintiff will receive $10,000.

Each driver, under the proposed settlement, would be entitled to part of the settlement based on the number of miles drivers picked up passengers and food deliveries, as well as the number of miles driven. The drivers’ attorney Shannon Liss-Riordan anticipated about half of the class will submit a claim.

This is but one of many legal actions Uber is facing over its use of independent contractors as drivers for the ride-hailing app, with the company facing another class action lawsuit lodged early this year over Prop 22. The lawsuit claims that Prop 22, reportedly written and heavily funded by Uber and other rideshare apps, leaves drivers with little pay and few options.

Uber has also been in the spotlight over a growing number of sexual assaults reported by drivers and riders alike.