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Drivers Fight Against Independent Contractor Classification to Gain Overtime Pay and Settle Class Action for $2.8 Million

American legislators try to write laws to be as clear-cut and loophole free as possible, but it’s not always easy. In addition to the various federal laws governing everyone in the country, each state and city has their own laws governing the citizens within their borders. All federal and local laws need to be considered when conducting operations in the United States.

A class of drivers who filed a wage and hour lawsuit against 3PD Inc. (now known as XPO Logistics) allege the company illegally misclassified them as independent contractors. According to 3PD, the drivers were contracted, and not employed, by 3PD and because of this the drivers were held responsible for all the costs associated with making deliveries (the costs of the trucks, gas, and maintenance on the trucks) and were charged for any goods that were damaged in transit.

The drivers also allege they were regularly made to work overtime without the proper overtime compensation of one and one-half times their normal hourly rate. The class action lawsuit alleged a typical week for a driver of 3PD usually meant six or seven days of working 12-14 hours per day. The drivers’ responsibilities consisted of delivering furniture and appliances to stores including Macy’s and H.H. Gregg.

The deliveries were sent out from 3PD’s warehouses in Minooka, Bolingbrook, and Aurora, all of which are located in Illinois. The class action wage and hour lawsuit therefore alleged the drivers were subject to the Illinois state law that governs the proper use of independent contractors. But 3PD alleged the Federal Aviation Administration Authorization Act (FAAA) pre-empted state labor laws.

Rather than continuing to debate the matter in the courts, the two parties decided to settle the dispute for $2.8 million. More than $900,000 of that settlement money will go to cover attorneys’ fees and expenses, two of the class representatives will receive $20,000 each, and $10,000 will go to a third class representative.

The remaining $1.85 million will be paid out to the class members who submit a valid claim for relief. So far, 115 of the 258 eligible class members have filed valid claims. That makes for an average payout of $15,000 per class member, although the actual payout to each class member will depend on the estimated number of hours worked during the relevant class period. Harold Lichten, the plaintiff’s attorney, said he estimates an additional 10-15% of the eligible class members will submit claims now that the wage and hour lawsuit has been settled.

The class action lawsuit alleged $5 million in damages when it was initially filed, but part of the process of negotiating a settlement is that each side has to make some concessions. The agreed-upon terms of the settlement are the result of nine months of negotiation, mediation, and reviewing 14,000 documents of discovery. Now that an Illinois federal judge has determined the terms of the settlement are fair to both sides and has granted approval of the settlement, 3PD can start sending out checks to eligible class members within the next couple of months.

The Chicago class action attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oak Brook offices and pursue claims for workers all over the Chicago area including Prospect Heights, Ivanhoe and Long Grove. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kendall, Lake, McHenry, Kane and Cook Counties.

Our Round Lake and Knollwood overtime lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers mis-classify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

The Chicago Overtime Law Center is based in Chicago, and represents clients throughout the country who have unpaid overtime and other employment right claims.