Uber Reaches $7.5 Million Settlement in FCRA Background Check Dispute
A long-running Uber background check dispute has reached resolution with a proposed $7.5 million settlement, ending years of litigation over allegations that Uber Technologies Inc. and its subsidiary Rasier Inc. violated the Fair Credit Reporting Act (FCRA) when conducting background checks on prospective drivers.
Background of the Lawsuit
The conflict began in late 2014, when plaintiff Abdul Kadir Mohamed filed the first federal complaint alleging that Uber had mishandled driver background checks. Two additional lawsuits followed, and by October 2015, the cases were consolidated into a single class action.
Drivers involved in the case claimed that Uber:
Failed to provide a clear written notice stating it intended to obtain a background check
Did not obtain proper authorization before running those checks
Failed to give drivers a copy of their background report or a summary of their FCRA rights before taking adverse employment action
These alleged violations form the basis of the uber background check dispute, which contends that drivers were prevented from addressing inaccuracies before Uber made decisions affecting their ability to work on the platform.
Issues Raised: When an Uber Background Check Failed
Many drivers reported being denied access to the platform or removed from it because their uber background check failed, often without warning or access to the report behind the decision. Under the FCRA, employers—even companies that classify workers as independent contractors—must follow specific procedures when using consumer background reports for hiring or contracting decisions.
The plaintiffs argued that Uber’s failure to comply with these procedures resulted in drivers losing potential income and opportunities without due process.
Uber, however, denied wrongdoing and maintained that FCRA requirements do not apply to individuals categorized as “independent transportation providers,” their terminology for drivers.
The Settlement Agreement
Despite denying liability, Uber agreed to settle to avoid the ongoing costs and uncertainties of litigation. The $7.5 million settlement aims to compensate affected drivers who either used or sought to use the platform during the period covered by the lawsuit.
Drivers who wished to exclude themselves from the settlement or file objections were required to do so by Dec. 14, 2017.
Final Approval Efforts
On January 25, 2018, a group of drivers urged a federal judge to grant final approval of the settlement, arguing that it fairly addressed the alleged FCRA violations and provided meaningful relief. If approved, the agreement would resolve all three consolidated lawsuits.
Implications for Gig-Economy Worker Protections
The settlement highlights increasing scrutiny over the treatment of gig-economy workers and whether companies must adhere to federal consumer protection laws when using background checks. The uber background check dispute underscores the importance of proper notice, consent, and transparency when background screening affects a worker’s ability to earn income.
Disclaimer
This article is provided for informational purposes only. It summarizes publicly available information and does not describe every detail, argument, or legal development related to the lawsuit. It is not legal advice, and individuals seeking guidance regarding their rights or involvement in this matter should consult an attorney or review official court documents.