An apology is worth a lot. But is it worth $2.77 million?
Hundreds of truck drivers will split more than $2 million after a motor carrier settled its misclassification lawsuit with the New Jersey Department of Labor and Workforce Development.
In July, New Jersey and STG Logistics reached a $2.77 million settlement to resolve allegations that the shipping and logistics companies misclassified hundreds of truck drivers as independent contractors.
Under the settlement, $2.22 million will be split among the truck drivers. The remaining $555,000 will go to the state.
This settlement resolves the first lawsuit filed under New Jersey’s 2021 law that permits the state to file suit in New Jersey Superior Court against employers who have misclassified workers as independent contractors.
“Corporate wrongdoers cannot pad their profits by cutting corners and exploiting the workers who keep their businesses running,” New Jersey Attorney General Jennifer Davenport said in a news release. “This settlement will ensure that hundreds of workers will finally receive money they are rightfully owed and should have been paid right from the start of their tenure as employees. We are proud to stand with the Department of Labor in holding STG accountable for its unlawful conduct.”
Although STG filed for bankruptcy, the settlement amount is considered a priority under the bankruptcy code and settlement agreement to ensure that the truck drivers are compensated before other creditors.
The investigation leading to the lawsuit began when STG Drayage was XPO Logistics Drayage.
In March 2022, XPO sold its intermodal business to STG Logistics for more than $700 million. In addition to taking over operations, including drivers working for XPO, STG Logistics also assumed the liability for XPO’s past employment practices.
The state filed its lawsuit against STG in New Jersey Superior Court on Dec. 11, 2023.
New Jersey alleged that STG violated the rights of hundreds of truck drivers by treating them as independent contractors.
The state said that the misclassification deprived workers of rights and benefits afforded to employees, including minimum wage, overtime, workers’ compensation, unemployment insurance, temporary disability benefits, earned sick leave, job-protected family leave and equal pay protections.
Under New Jersey’s ABC Test, workers are presumed to be employees unless a company can prove the individual is largely free from the company’s control, performs work outside the company’s usual business or outside its places of business and has their own independent business. The state claimed that STG failed to meet any of those requirements.
Land Line Digital Editor Tyson Fisher contributed to this report.
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