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US District Judge Michael Baylson, sitting in Philadelphia, rejected calls from drivers for UberBlack, the company's limo division, to be treated as employees with all of the perks that go with. The drivers work when they want to and are free to nap, run personal errands, or smoke cigarettes in between rides, Baylson said.

The ruling comes as courts across the country are grappling with how to apply traditional business and legal concepts to the emerging gig economy.

The original settlement, now consigned to the bin, charged that Uber failed to live up to claims that it closely monitored employee access to rider and driver data and that it had deployed "reasonable measures" to secure personal data stored on a cloud provider's servers.

"I am pleased that just a few months after announcing this incident, we have reached a speedy resolution with the FTC that holds Uber accountable for the mistakes of the past by imposing new requirements that reasonably fit the facts", West said.

According to a report from Bloomberg, one of the plaintiffs' lawyers, Jeremy Abay, said he would appeal the ruling to the Third U.S. Circuit Court of Appeals, in Philadelphia.

Numerous cases filed against Uber have been sent to arbitration, but the plaintiffs in the Philadelphia case were among a small minority of drivers who had opted not to sign arbitration agreements with the company. The agreement states that driver issues must be settled through arbitration with Uber and not a court of law. But state agencies in California and NY have said that they are under those states' laws. "Donovan remains the controlling case in the Third Circuit, and it was published in 1985, so we'll be curious to see if the Third Circuit alters or otherwise updates the Donovan test so it can be more aptly applied in gig economy cases".

Because of those distinctions, Baylson said Uber drivers can't be considered employees under the Fair Labor Standards Act guidelines.

"Uber places no restrictions on drivers' ability to engage in personal activities while online, and plaintiffs here, in fact, engaged in a range of personal activities while online", Baylson said.

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