J.B. Hunt Agrees to $6.5 MILLION Settlement in Driver Misclassification Lawsuit
Los Angeles, CA – J.B. Hunt has agreed to settle an independent contractor misclassification class action lawsuit filed in California for $6.5 million.
According to court filings this week in U.S. Federal District Court for the Central District of California, attorneys for named plaintiff’s, Duy Nam Ly and Kiet Nguyen, asked the court for preliminary approval of the proposed settlement for the entire class of 312 truckers.
The suit, which was first filed in State court in 2018, alleged J.B. Hunt treated the intermodal independent contractors as employees yet did not provide the benefits enjoyed by employees.
Further, the plaintiffs argued the mega carrier failed to pay the independent contractors minimum wage, did not provide the California-mandated meal and rest breaks, and kept inaccurate labor records.
Both parties decided rather than have a protracted legal battle, which could have lasted years, to reach a “substantial settlement.”
Per the terms of the proposed settlement, the named plaintiffs will receive $25,000 and the remaining class of 312 truckers will be awarded approximately $20,000 adjusted for other payments to the California Labor and Workforce Development Agency.
The plaintiffs’ attorneys, Marlin & Saltzman, agreed to reduce its fee from 30 percent of the Gross Settlement Amount to 25 percent.
J.B. Hunt, represented by Scopelitis Garvin Light Hanson & Feary, admitted no fault, according to the filing.
This case was one trucking stakeholders were watching closely as it was expected to be the first major legal battle over misclassification since the Dynamex decision in 2018, which established the now infamous ABC test.
In September of last year, California’s Democratic governor Gavin Newsom signed controversial legislation which includes the ABC test known as Assembly Bill 5 (AB5).
It sent shockwaves through the California independent contractor community and trucking companies operating in the state.
Critics claimed if the law was enforced it could put as many as 70,000 independent truckers out of business.
Most at issue for motor carriers in the three-pronged test is the “B prong” which classifies a worker as an “employee” of the company unless that worker “performs work outside the usual course of the business of the employer.”
In January, a federal judge indefinitely blocked enforcement of AB5 in the trucking industry.
The matter is still being litigated.
However, in the proposed settlement, attorneys said this “shifting legal playing field” added motivation for both sides to ultimately reach a deal.
Photo courtesy J.B. Hunt