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Uber has agreed to settle a class action discrimination suit for $10 million

Three female software engineers filed a lawsuit against the company, saying Uber’s compensation practices were discriminatory.

Uber logo on a mobile phone in front of the Uber sign studioEAST / Getty Images

Uber is trying to tie up its legal woes one by one under the tutelage of its new executive team led by CEO Dara Khosrowshahi. The company has agreed to settle a discrimination lawsuit filed last year by three female software engineers for $10 million.

The lawsuit represented a class of 420 engineers who identified as women or people of color and claimed that the company’s payment system was discriminatory.

The suit, filed in October 2017 — just months after Susan Fowler published her own account of discrimination at the company — alleged that Uber’s compensation and promotion structure favored men and white or Asian employees.

As part of the settlement, Uber has agreed to enhance its systems for compensations and reviews and to regularly report diversity metrics. Company executives will also participate in a twice-yearly review of diversity growth, the pipeline and efforts to increase the representation of women and people of color.

The plaintiffs who originally filed the lawsuit on behalf of the class — Ingrid Avendano, Ana Medina and Roxana Del Toro Lopez — worked in the same engineering department as Fowler. In fact, according to emails Recode previously obtained, both Avendano and Medina had vocalized their concern over the department’s mismanagement of Fowler’s issues on a number of occasions.

“This is a very strong settlement that provides real value to class members for the discrimination and harassment they suffered, while ensuring that Uber reforms its employment practices to prevent future discrimination and harassment,” Jahan Sagafi, the attorney representing the plaintiffs, said in a statement. “We look forward to monitoring those reforms until late 2021.”

A judge still has to determine whether to accept the terms of the settlement, but an Uber spokesperson pointed out that the company has made a number of changes to the way it handles pay, and emphasized diversity efforts made by the company that address many of the stipulations in the settlement.

“This settlement involves claims dating back to July 2013 and, while we are continually improving as a company, we have proactively made a lot of changes since then,” the spokesperson said in a statement. “In the past year alone we have implemented a new salary and equity structure based on the market, overhauled our performance review process, published our first Diversity & Inclusion report and created and delivered diversity and leadership trainings to thousands of employees globally.”

Most recently, Uber hired its first chief diversity officer, Bo Young Lee, as Recode first reported.

Uber also published its first-ever diversity report in the months after Fowler’s essay went viral. As a young company focused on growth, Uber had long thought the primary role of its human resources department was to recruit talent. Under Uber’s then-CEO Travis Kalanick, the company declined to publish its diversity stats because Kalanick didn’t think they were a useful metric for the company, as Recode first reported.

But now the company has introduced new efforts to enhance its inclusion of women and people of color, including delivering diversity training for many of its employees.

Uber also raised salaries for all employees to help close the gender pay gap in July of 2017 — an endeavor that likely cost hundreds of millions of dollars, as The Information reported at the time.

Here’s the proposed settlement agreement:

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