Truck drivers for National Freight Inc. (NFI) have reached a settlement with the company in an employee misclassification lawsuit that had been going on for nearly a decade.
NFI has agreed to pay $5.75 million to end a lawsuit accusing the logistics giant of misclassifying certain truck drivers as independent truck drivers. The class action suit includes just over 100 drivers. After attorney fees, each driver could receive more than $30,000.
At the center of the dispute are truck drivers who delivered goods from Trader Joe’s warehouses. NFI allegedly hired both employees and independent contractors who performed the same job. This lawsuit was a typical misclassification case about control over independent contractors’ daily tasks. Contractors had to display NFI’s logo and use its Department of Transportation number. They also claimed they couldn’t deliver for other companies.
Specifically, contractors were assigned set routes that included the time they had to leave a distribution center. Drivers were to arrive 30 minutes before that scheduled time and were monitored with NFI’s Qualcomm system during the trip.
Independent contractors could not negotiate the per-mile pay or fuel surcharges, giving up control over how much they could earn. The complaint alleged that National Freight would delay increases in the fuel surcharge amounts for several weeks when the cost of fuel increased. However, when the cost of fuel decreased, the fuel surcharge amounts would be immediately calculated.
Despite not being employees, contractors had to sit through various NFI company meetings. No additional pay was received for that time.
The lawsuit also claimed NFI independent contractors were not paid for all miles driven. Rather, they were oftentimes paid based on predetermined miles instead of actual miles.
Drivers had to cover their own workers’ comp, liability and job-related insurance. These costs were deducted from their weekly settlement statements.
An escrow account was set up for damage claims, with money returned to drivers 30 days after leaving the company. Drivers also paid for the Qualcomm system through weekly deductions.
Several drivers filed the lawsuit in 2015. NFI fiercely fought back, including by trying to decertify the class of drivers. Class certification was eventually granted in 2020.
Eligible drivers included those who entered into an independent contractor agreement with NFI that had a New Jersey choice-of-law clause. Drivers must also have driven full-time to deliver for Trader Joe’s beginning June 22, 2009.
The settlement is not an admission of liability. NFI maintains it properly treated and paid drivers as independent contractors and owes them nothing. LL
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