Almost 200 employees of Uber, including their current and former workers, have sued the company. They have detailed that the company has broken an agreement with the employees that provided them with shares while saving them income tax worth millions.

Restricted Stock Unit

The Restricted Stock Unit agreement is a crucial factor in Silicon Valley recruitment contracts. Tech startups often resort to this to attract talent as an alternative to competitive salaries in the market. Approximately 15,000 employees are affected by this. Allegedly Uber changed the date to an earlier one when the shares were to be issued. The employees claim that the agreement’s date would lock the shares at the IPO price of $45. Uber believed it would eliminate the shares’ risk more later on and save them compensation expenses.

Employee Lawsuit

The lawsuit also alleges that Uber knew and relied on the share price dropping in the six months of the pandemic lockdown. The employees were not allowed to sell their shares. After those six months, the stakes were worth $27, but the employees have to pay taxes based on the $45 IPO share price. If Uber had stuck to their agreement and offered the shares six months after the IPO, they would have only to pay $27 on the share price. Because of the accelerated date, the employees have to now deal with several hundred million dollars in income tax.

Investors Also

Employees say Uber knew this because they witnessed Lyft deal with a fall in its stock price earlier in the year. The complaint also details how Uber is being sued by its investors, who say the company painted a false and misleading picture before the IPO.

In response to this lawsuit, a spokesperson calls these allegations “without merit.”

Uber is already under fire for not giving its drivers the proper employee protections and benefits by classifying them as independent contractors.