Prime Agrees to $28 MILLION Settlement in Class Action Truck Driver Wage Dispute
Springfield, MO – New Prime inc. (Prime) has agreed to settle a truck driver wage and labor classification legal dispute for $28 million.
According to a proposed settlement agreement filed on July 20, 2020 in the U.S. District Court for the District of Massachusetts, Prime has come to terms with two named Plaintiffs who alleged the company violated the Fair Labor Standards Act (FLSA) and state wage and hour laws.
If approved, it would end a more than five-year legal battle that began on March 4, 2015, when truck driver Dominic Oliveira filed a lawsuit in United States District Court for the District of Massachusetts on behalf of himself and other similarly situated trainees and drivers for Prime.
Specifically, the complaint alleged violations of the FLSA and that Prime failed to properly pay trainees during orientation.
Oliveira was first hired by Prime in March of 2013.
According to court documents, he later became an independent contractor (IC) leased to Prime in May of 2013 until June of 2014.
He accused the Springfield, MO-mega carrier of “willful, malicious, and deliberate” misclassification of independent contractors as employees arguing Prime “exercised operational and actual control over ICs such as scheduling, vacations, home time, forcing dispatch, rendering drivers unable to work for any other trucking companies or shippers.”
Further, Oliveira asserted Prime’s pay practices with respect to employee drivers and ICs violated federal and state wage and hour laws.
On January 22, 2019, Rocky Haworth filed a lawsuit in the United States District Court for the Western District of Missouri on behalf of himself and other similarly situated B and C seat drivers employed at Prime.
Haworth’s action alleged that Prime’s compensation of B and C seat drivers violated the FLSA and Missouri wage laws.
The two actions were later joined into one class action.
The proposed settlement class includes all individuals who have attended training to become truck drivers for Prime and/or have driven for Prime as employee drivers and/or as ICs who have leased their trucks through Prime at any time from October 2, 2012 to May 8, 2020, and all individuals who have otherwise attended training in Missouri to become truck drivers for Prime at any time from March 4, 2010, to May 8, 2020.
According to the terms of the proposed settlement, Oliveira will be awarded $50,000 and Haworth will receive $25,000.
Plaintiff’s attorneys fees will not exceed $9.24 million, which is 33% of the proposed settlement.
Additionally, Plaintiff’s attorneys also indicated they will seek reimbursement of litigation costs in an amount not to exceed $225,000.
The remaining funds will be distributed to a potential 40,000 class members.
The proposed settlement is comprised of four classes, which include:
• Orientation Class Fund: Individual allocations of this fund will be based on the type of training or orientation you attended and the location where you attended it.
• B/C Seat Class Fund: Individual allocations of this fund will be based on: the miles driven in B or C seat status, compared to the gross earnings during that time.
• A Seat Class Fund: Individual allocations of this fund will be based on: the miles driven in A seat status as an employee driver (also known as “company driver”), compared to the gross earnings during that time.
• Independent Contractor Class Fund: Individual allocations of this fund will be based on: the miles driven in A seat status as an independent contractor, compared to 65% of the gross revenues earned during that time.
Prime originally sought to compel arbitration under the Federal Arbitration Act (FAA) arguing arbitration was stipulated in the terms of its employment contract agreement with Oliveira.
Oliveira disagreed and took his case to the U.S. Court of Appeals for the First Circuit asserting ICs are exempt from the FAA.
The Court ruled in Oliveira’s favor and Prime then appealed the case all the way to the U.S. Supreme Court in 2018.
However, in an opinion handed down in January of 2019, the U.S. Supreme Court denied Prime’s request.
Prime also sought to compel arbitration under the Missouri Uniform Arbitration Act (MUAA).
Prime was reprimanded by the U.S. District Court for the District of Massachusetts last December for attempting to unnecessarily drag the case out even further by pursuing that route.
“Prime spent more than four years litigating a threshold issue regarding arbitration under the Federal Arbitration Act,” the district court wrote. “A timely motion to compel arbitration under the MUAA could have saved the plaintiffs, including the opt-in plaintiffs, and the court unnecessary time and expense. But Prime chose not to invoke the MUAA until it faced a potential loss on the Federal Arbitration Act issue in the Supreme Court. Meanwhile, the drivers, who may have earned negative weekly pay to improper deductions, have not received relief.”
Prime agreed to the proposed settlement, but denies all allegations in the complaints.