Uber Class Action Says Employees Paid Less Based on Gender

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Uber Technologies Inc. was hit with a collective action lawsuit alleging its policies and practices cause female engineers to receive less compensation and fewer promotions than their male counterparts.

“Uber has engaged in systemic gender discrimination in pay against its female employees,” the Uber class action lawsuit states. “Uber has caused, contributed to, and perpetuated gender-based pay disparities through common policies, practices, and procedures, including but not limited to common compensation and performance management policies, and centralized decision-making.”

Plaintiff Roxana del Toro Lopez filed the Uber class action lawsuit on Oct. 27 in the U.S. District Court for the Northern District of California. She is a female Latina software engineer who was employed by Uber in San Francisco from May 2015 through August 2017.

Toro Lopez claims she was treated differently by Uber than her male colleagues. According to the Uber class action lawsuit, she was initially hired as an independent contractor instead of a full-time employee. She says her classification as an independent contractor impeded her from working effectively with the team because she had limited access to the company’s tools and training sessions. She also says the independent contractor classification meant she was paid less than full-time Uber employees.

Uber sets its initial compensation for employees based on their past compensation, according to the Uber class action lawsuit. Toro Lopez claims that women are generally paid 18 percent less than men in the same marketplace, putting women at a financial disadvantage.

Further, Uber’s compensation and promotion policies disproportionately benefit men over women, Lopez alleges in the Uber class action lawsuit. She says that the inequity in compensation compounds over time because Uber’s decisions about salary increases and other compensation decisions are affected by the employee’s current salary.

According to the Uber class action lawsuit, Uber uses a “stack ranking” system in which supervisors are required to rank employees from worst to best as a method of evaluating employee performance.

“An employee’s rank is not based on valid and reliable performance measures,” Toro Lopez says in the Uber class action lawsuit. “The used criteria are not valid or reliable, and they do not properly measure performance. Uber implements this performance measurement system in a way that disadvantages female employees.”

Toro Lopez claims this ranking system adversely affects female employees because they receive, on average, lower rankings than their male counterparts despite equal or better performance. Therefore, they are less likely to receive promotions within the company, further compounding the compensation inequities that harm women who work for Uber.

The Uber class action lawsuit accuses Uber of violating the federal Equal Pay Act. Toro Lopez is seeking injunctive relief, declaratory judgment, back pay, damages, attorneys’ fees and costs, pre- and post-judgment interest, and other relief deemed proper by the court.

Toro Lopez is represented by Jahan C. Sagafi, Rachel W. Dempsey, Adam T. Klein and Rachel M. Bien of Outten & Golden LLP.

The Uber Employee Discrimination Class Action Lawsuit is Roxana del Toro Lopez v. Uber Technologies Inc., Case No. 3:17-cv-06255-MEJ, in the U.S. District Court for the Northern District of California, San Francisco Division.

UPDATE: On March 26, 2018, Uber agreed to  pay $10 million to settle a class action lawsuit claiming that the company pays software engineers unequally based on gender and race.

UPDATE 2: On Aug. 20, 2018, two plaintiffs in a class action lawsuit accusing Uber Technologies Inc. of unlawful discrimination and harassment on the basis of gender, race and national origin have asked a California federal judge to grant final approval to a $10 million class action settlement.