After losing Supreme Court ruling, Prime offers $28M to settle lawsuits with drivers
To lay to rest two class-action lawsuits, truckload giant Prime, Inc. (No. 13 in the CCJ Top 250) has proposed a sweeping settlement that would pay as much as $28 million to as many as 26,000 former and current drivers and independent contractors.
The Springfield, Missouri-based company operates a fleet of roughly 9,000 trucks.
A motion asking the court to grant the settlement proposal was filed July 20 in federal district court in Massachusetts, coming just shy of a year and a half after Prime lost a bid to have the lawsuit tossed by the U.S. Supreme Court over a procedural issue.
Prime argued in the Supreme Court in 2018 that because it included arbitration clauses in its agreements with independent contractors, any employment disputes should be handled by third-party arbiters. The Supreme Court disagreed in February 2019, ruling that transportation workers such as truck drivers are exempt from arbitration clauses, thus throwing the original lawsuit against Prime back to the lower courts to decide.
“Prime is pleased that it has reached a resolution of this litigation matter,” said Steve Crawford, Prime’s general counsel. “We are proud of how we treat our drivers, and we work hard to get it right. Nevertheless, we decided that moving past the litigation was the right thing to do.”
In court documents filed this week, Prime says the settlement agreement was reached after a month of “arm’s length negotiations” with plaintiffs in the case. The settlement combines two class-action cases, Oliveira v. New Prime and Haworth v. New Prime, both of which claimed that the fleet violated federal and Missouri state wage and hour laws. In the case of Dominic Oliveira, whose lawsuit ultimately spurred the Supreme Court case in 2018, he claimed he and others were misclassified as independent contractors and should have been classified as employee drivers — and thus were denied certain wages and benefits owed by law.
The settlement agreement covers all drivers, prospective drivers and independent contractors who worked at Prime – or attended driver training at the company – between October 2012 and May 2020. At least $14 million will be set aside to be distributed in full, with another $14 million available, depending on how many Prime drivers join the class-action settlement. The funds, if approved by the court, would be distributed based on tenure at the company, type of employment and other factors. All members of the class will receive at least $100.
The court still needs to stamp its approval on the agreement, and a fairness hearing will be set for a judge to consider the settlement. The lawsuits have been ongoing since March 2015.
In addition to divvying up the $14 million in funds to former and current Prime drivers, Oliveira and Rocky Haworth will receive $50,000 and $25,000 respectively.
Supreme Court Ruling