A group of more than 300 independent contractors for J.B. Hunt and the company itself are seeking court approval of a $6.5 million settlement to end an employee classification lawsuit that began in 2019.
In a filing earlier this week in the U.S. Federal District Court for the Central District of California, attorneys for the two initial plaintiffs and other potential members of the class action against Hunt said they had reached agreement with Hunt’s attorneys on the action. The settlement would give each of 312 class members approximately $20,000 per person to settle what is familiar legal ground – whether a driver working for a company as an independent contractor should be considered an employee.
The case, had it been litigated, would have been a test of the ABC standard that was brought into employer-contractor relationships by the Dynamex decision of 2018. The ABC test can be defined differently depending upon the action. But in the initial case filed by the Hunt plaintiffs last year it said a worker could only be considered an independent contractor if he or she is: a) free from the “control and direction” of the company doing the hiring; b) performing work that is “outside the usual course of the hiring entity’s business;” and c) the worker is engaged in an “independently established trade, occupation or business of the same nature as the work performed” for the company doing the hiring.
The ABC test is at the heart of AB5, the legislation that put the three-pronged test into a statute, rather than just the body of civil law. However, while it is in effect for numerous industries in California, court rulings have said it is not enforceable for trucking because it conflicts with other federal laws.
In its request for the court to approve the settlement, attorneys at Marlin & Saltzman, representing the plaintiffs, said they and the attorneys for J.B. Hunt at Scopelitis Garvin Light Hanson & Feary know each other well, spending more than 11 years litigating a previous driver classification case before settling. “This time, J.B. Hunt’s counsel reached out promptly once the litigation heated up because in part, the parties faced many very quick deadlines imposed by this court,” according to the request for settlement approval. “To avoid a possible second decade of litigation, with ongoing certainty relating to class certification, liability and preemption, settlement was reached.”
Filings in the case date back to February of 2019 and also show that the decision to settle dates back to October.
Attorney’s fee will be 25%
Under the terms of the settlement, Marlin & Saltzman said it would not seek a fee of more than 25% of the $6.5 million of the Gross Settlement Amount, though Hunt had agreed to not object to a 30% fee. The two plaintiffs in the case, Duy Nam Ly and Kiet Nguyen, would seek a “service award” of $25,000. The other class members of the 312 drivers would receive an average payment of $20,000, adjusted for other payments to the California Labor and Workforce Development Agency.
Had the case gone to trial, it would have involved what the plaintiffs’ attorneys said would be “novel and cutting-edge legal theories related to class certification, liability under Caliifornia’s wage and hour laws and federal preemption.” The prospect of a lengthy battle with so many issues on the table – what the attorneys called a “shifting legal playing field” – led the two sides to “focus on prompt and targeted legal discovery, depositions, and mediation-related information discovery, and reached a prompt, yet substantial settlement.”
The allegations against J.B. Hunt in the initial lawsuit filed in June 2019 are a familiar litany in the body of legal proceedings on issues of driver classification. The drivers had signed Intermodal Independent Contractor Operating Agreements as independent contractors with J.B. Hunt. The original suit charged that they performed the same tasks as company drivers, but that total compensation at times failed to meet minimum wage requirements, that rest and meal breaks were not provided, and that labor records were not kept properly. As the plaintiffs’ attorney said in the request for approval of the settlement, “J.B. Hunt has denied and continues to deny all the claims and contentions alleged…in the action.”
Attorneys with Scopelitis declined comment.