Corporation to Pay $23 Million to Settle Employee Lawsuit
A California corporation reached a tentative settlement of a 2003 class-action complaint in federal court alleging the employer illegally withheld overtime pay to drivers of its delivery routes. According to the lawsuit, the employer misclassified route drivers as exempt employees under wage-and-hour laws to avoid paying overtime for working more than a 40 hour workweek.
Misclassification of the employees can result in workers’ comp problems, as well as, lawsuits.
Union representatives said the employer will pay $23 million to settle the matter, in line with a federal mediator’s proposal. The dispute was in arbitration up to this point.
A judge for U.S. District Court in San Jose halted its proceedings last week while the parties documented and made arrangements for final approval of the deal. (workersxzcompxzkit)
The union said it would be months before a final settlement agreement gains approval from the court.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-786-8286.
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