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Uber Technologies Inc. lost their win in court regarding a $100-million settlement with their drivers. A federal judge in California, Edward Chen, rejected the agreement. The result may be that Uber can walk away from more negotiations. The hint was that the court may overrule a pretrial decision on whether drivers for Uber are employees or are independent contractors.

If the case does go to trial, Chen stated that the deal was risky but unfair, mostly because it low-balled claims under the state’s law. This has been a point debated for more than three-years now. If the lawsuit collapses, it will leave Uber relatively unscathed and allow them to keep drivers classified as independent contractors.

Prior to the appeals court added a kink to the mix, the biggest challenge for Shannon Liss-Riordan, the drivers’ attorney, was to convince the federal judge that the agreement reached with Uber in April was both fair and was reasonable. Liss-Riordan stated that if the Court of Appeals overturns Chen’s decision, her class action lawsuit would be reduced to a few thousand people.

A spokesman for Uber stated that they believe the settlement was fair and reasonable. Legal experts following the case say that the company may be better off now by forcing a one-by-one arbitration rather than a class action movement. It forces all parties to start over. Most likely, they agree that Uber won’t want to completely start over.

The settlement agreement was partially rejected due to a provision that would evaluate state labor code violations at about $1-million. Chen noted when delivering his ruling that according to California penalties, the case could reach an amount of more than $1-billion. A settlement would represent just a portion of the case’s total full worth.