Editorial: Sledgehammer Shannon

A significant number of class-action lawsuits are nothing more than thinly veiled shakedowns.

Designed to right wrongs and win awards for the ripped-off and victimized or punish corporate malfeasance, class-action lawsuits too often do nothing more than enrich the attorneys involved. Even if the lawyers successfully negotiate a settlement, the amount of money that finds its way to the individual “victims” often amounts to a pittance while the lawyers need wheelbarrows to haul away their loot.

Consider the recent lawsuit targeting ride-sharing outfit Uber.

Upwards of 385,000 Uber drivers in California and Massachusetts sued Uber, arguing they should be treated as employees due to the fact that the company largely controls their work, establishes their compensation and enforces their vehicle standards.

Their lawyer, Shannon Liss-Riordan, has made her name dragging large companies — including Starbucks and Federal Express — into court for their alleged evil deeds against workers. Last year, Mother Jones magazine dubbed the Boston-based attorney “Sledgehammer Shannon.”

Last week, the two sides reached a deal when Uber agreed to cough up a ransom in order to avoid an expensive trial. The company will pay $100 million and revise its policy about deactivating unpopular drivers from its app without warning or recourse. Uber will also have to revise its driver termination policies, and allow drivers to post signs in their cars soliciting tips.

A federal judge must approve the settlement.

The deal preserves Uber’s successful and consumer-friendly business model. By forcing the company to reclassify drivers as employees, the government would be potentially regulating Uber out of business while also jeopardizing the viability of several other popular and flourishing “new economy” endeavors.

Ms. Liss-Riordan called the agreement a victory for drivers. The settlement, she said in a statement, “provides significant benefits — both monetary and non-monetary — that will improve the work lives of the drivers and justifies this compromise result.”

In fact, the compromise will be much more beneficial to Ms. Liss-Riordan than to most of the drivers she portrayed as indentured servants. According to a USA Today account, “court documents show that most eligible drivers will probably get less than $25.”

Meanwhile, The Wall Street Journal noted, Ms. Liss-Riordan will take home $25 million for her efforts on behalf of the exploited and oppressed — soon to raise her sledgehammer against some other corporate “villain” with deep pockets. Nice work, if you can get it.