Judge approves $13.5 million settlement for misclassified drivers

By Tyson Fisher, Land Line staff writer | Thursday, July 14, 2016

Nearly four years of a court battle could be nearing a close for hundreds of drivers embroiled in a lawsuit against Exel Direct. A U.S. District Court judge in Northern California has approved of a preliminary settlement of $13.5 million to the plaintiffs for allegations of misclassification as independent contractors, according to court documents.

In a lawsuit originally filed in August 2012, 386 drivers for Exel Direct claimed the company misclassified them as independent contractors in addition to:

  • Failure to pay minimum wage
  • Failure to pay overtime
  • Failure to provide off-duty meal periods
  • Failure to provide off-duty rest periods
  • Unlawful deductions from wages
  • Cost of physical examinations
  • Coerced purchases
  • Reimbursement of business expenses
  • Failure to keep accurate payroll records
  • Failure to furnish accurate wage statements
  • Waiting time penalties
  • Unfair competition

According to the lawsuit, prospective drivers for Exel Direct were required to obtain a business license proving they were a LLC and sign an “Independent Truckman’s Agreement.” Applicants had to undergo drug and alcohol testing at their expense and agree to future testing at the company’s discretion throughout employment.

Despite requests for Spanish translations, contracts were provided in English only and were not open to negotiations. The one-year contract remained in effect year-to-year unless otherwise terminated.

Drivers also had to purchase or lease vehicles from a third party through Exel Direct. Costs of leased vehicles were deducted from paychecks. Exel Direct required control and exclusive use of any equipment, including the vehicles. Two weeks of training were also mandated, which discussed how to drive a vehicle, what speed to drive, what to discuss with customers, etc.

Several more allegations, including the demand that drivers speak English during deliveries, were mentioned in the lawsuit.

A fairness hearing for the $13.5 million settlement is scheduled for Dec. 9.

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