Independent Contractor Misclassification – Lawsuit Settlements

A lot of companies hire independent contractors to do work for them, but what are their legal rights when the relationship goes south? What happens if they get injured while working on a construction site and there’s no company insurance policy in place? This article will discuss contract disputes that have resulted in class-action lawsuits.

The “misclassified employees awarded $1.3 million” is a settlement that was reached between the federal government and several employers who had misclassified their employees as independent contractors. The settlement will provide for back-pay, interest on unpaid wages, and penalties to the affected workers.

Independent Contractor Misclassification - Lawsuit Settlements

Employee misclassification as independent contractors is an increasing issue in the United States, robbing workers of fair compensation, benefits, and job stability. Employee misclassification may rob governments of tax revenue and put firms that follow the laws at a disadvantage.

Companies that misclassify personnel have been placed on notice due to increased regulatory agency crackdown. Several seven-figure worker misclassification settlements have been achieved as a consequence of government charges, but even greater settlements—many surpassing $10 million—have been won in cases filed by employees themselves.

Workers misclassified on a Form 1099 may be eligible to receive back pay and other benefits if they file a class action lawsuit asserting that they should have been paid on a Form W2. These employees may be found in almost every industry, although they are disproportionately prevalent in transportation, technology, automobile services, staffing, and the sharing or “gig” economy.

Workers should review the settlements below and call if they feel they are being wrongfully classified as an independent contractor.

The Sharing Economy is a kind of economy in which


In a complaint taken against Lyft on behalf of California drivers who claimed the ride-hailing business misclassified them as independent contractors, a court granted a $27 million class action settlement. Drivers will remain contractors (not employees) under the terms of the settlement, which obtained preliminary approval in June 2016. They will get money to pay expenditures such as petrol and car upkeep. Lyft also agreed to alter its terms of service to clarify the circumstances under which drivers’ accounts may be canceled.


In April 2016, Uber offered a $100 million settlement to 385,000 California and Massachusetts drivers. The agreement would have enabled the ride-hailing firm to keep its drivers classified as independent contractors. Uber has also agreed to alter parts of its driver regulations, enable tip signs to be placed inside vehicles, and assist in the formation of driver unions.

In August 2016, U.S. District Judge Edward Chen rejected the settlement because he considered the proposed sum was “not fair, appropriate, or reasonable” in its whole.


Port Truckers in Southern California

In July 2016, numerous trucking firms and around 400 Southern California drivers agreed a $5 million settlement in a class action lawsuit. The case alleged that the drivers should be classified as employees of the trucking businesses rather than independent contractors, and the corporations were accused of violating labor rules. Drivers claimed they were denied privileges such as breaks and expense reimbursement since they had to pay for vehicles and upkeep out of pocket.

Hundreds of lawsuits have been filed on behalf of Southern California truckers who operate at the Los Angeles and Long Beach ports in recent years.


FedEx has agreed to pay $240 million to delivery drivers in 20 states to resolve claims that the firm misclassified them as independent contractors. FedEx has partnered with firms that directly hire drivers since 2011. The agreement impacts 12,000-13,000 drivers, with some receiving tens of thousands of dollars in compensation. FedEx made a similar $228 million arrangement with a group of California drivers in June 2015.


In June 2014, SuperShuttle, a California-based airport shuttle operator, agreed to a $12 million settlement for labor misclassification. The settlement compensated qualifying SuperShuttle franchisees/owner-operators for outstanding salaries, expenses, legal costs, and other expenses. Each of the 3,000 class members was entitled to around $2,350 under the provisions of the agreement.

Bimbo Bakeries is a chain of bakeries in the United States

In November 2012, Bimbo, which owns baked goods brands such as Sara Lee, Entenmann’s, and Thomas’, reached a $3.5 million settlement with a group of Connecticut wholesalers. The distributors claimed they were misclassified as independent contractors and were denied health insurance, paid time off, and compensation for expenses. They also claimed that federal and state laws did not provide them with enough labor safeguards.

Bimbo employs both independent distributors and drivers.

Newspaper deliverers

The Sacramento Bee is a local newspaper in Sacramento, California.

A Sacramento superior court ruled in 2014 that Newspaper deliverers for The Sacramento Bee is a local newspaper in Sacramento, California. were improperly classified as independent contractors and granted them employee status. Around 5,000 carriers for The Sacramento Bee is a local newspaper in Sacramento, California. filed a class action lawsuit seeking reclassification and mileage reimbursement reported to be worth more than $21 million. According to the judge, Bee carriers “had little or no right to negotiate the terms” of contracts they signed with the paper, which managed, trained, and supervised the carriers.

The San Diego Union-Tribune is a newspaper based in San Diego, California.

Carriers for The San Diego Union-Tribune is a newspaper based in San Diego, California. were awarded more than $4 million, plus attorney fees, when a judge ruled in January 2014 that 1,235 carriers who worked from 2005 to 2007 were misclassified as contractors.

The Orange County Register is a newspaper in Orange County, California.

A class action lawsuit filed by Newspaper deliverers for The Orange County Register is a newspaper in Orange County, California. settled in August 2013 for a reported $22 million. The Orange County Register denied any wrongdoing but agreed to compensate carriers—who remain independent contractors—for overtime, mileage reimbursement, and additional compensation. The carriers’ attorney argued that the workers were employees who should have been provided benefits such as workers’ compensation coverage and FICA tax withholding.

Representatives of Customer Service

Arise Virtual Solutions Inc. is a company that provides virtual solutions.

Hiring agency Arise Virtual Solution for AT&T and Apple accounts in California agreed to a $1.24 settlement in January 2013 to resolve allegations that their Representatives of Customer Service were misclassified as independent contractors. The home-based virtual call center agents alleged that due to being misclassified, they were paid less than the minimum wage and denied the costs of training, expenses, employer tax contributions, unemployment insurance, and workers compensation.

Oil & Gas Workers

J&A Services LLC

A $2 million settlement was reached in April 2014 between oil field workers claiming to be wrongly misclassified as independent contractors and J&A Services LLC. Under the deal, 71 oil and gas well workers in Colorado, North Dakota, Pennsylvania, and Texas were awarded an average payout of $16,000 for unpaid overtime. Plaintiffs alleged that J&A Services violated the Fair Labor Standards Act by not paying them time and a half for working more than 40 hours in a week.

Dancers from the Far East

Exotic Dance Club/Club Extasy Exotic Dance Club Fuego’s Exotic Dance Club/Club Extasy Exotic Dance Club

Dancers from the Far East for the two clubs, located in Prince George’s Country, Maryland, were awarded more than $265,000 for unpaid minimum wage and overtime in February 2015 after a judge found they had been improperly classified as independent contractors. Individual dancers received between $18,000 and $103,000 in back wages under Maryland labor laws. The judge ruled that the dancers were club employees because they were integral to the business and their job duties required a degree of skill.

Rhino with Spearmint

A nationwide class action lawsuit filed by dancers for the Rhino with Spearmint adult nightclub resulted in a settlement worth nearly $13 million. The dancers claimed they were employees of the club, not independent contractors, and owed minimum wage and other benefits. Compensation was provided to dancers in California, Nevada, Kentucky, Idaho, Texas, Nevada, and Florida. As part of the deal, the Rhino with Spearmint, Rouge, and Blue Zebra gentleman’s clubs agreed to consider dancers employees moving forward.

Installers for the Home


Workers claimed they were misclassified as independent contractors and denied overtime payments and other employee benefits, and Lowe’s agreed to pay $6.5 million plus legal expenses to resolve a class action complaint. Lowe’s controlled all elements of the installers’ employment, including when and where they completed projects, how they dressed, and whether they may do additional work for clients not designated by Lowe’s, according to the court. The agreement included over 4,000 product installers who worked for Lowe’s between June 2008 and the settlement date in May 2014.

Workers in the cleaning and janitorial industries

CleanNet USA Inc. is a company based in the United States.

According to charges made in a Massachusetts class action lawsuit settled for $7.5 million in 2013, commercial cleaning business CleanNet USA misclassified “franchisee” employees as independent contractors. CleanNet allegedly misclassified employees in order to evade timely wage payment, tricked them into paying money for franchises that didn’t give the profitable returns they were promised, and targeted non-English speaking immigrants, according to the complaint.

Misclassified? Find out how a lawsuit may assist you.

Wages and other benefits may be recoverable via a misclassification case. During a free case review with, see whether you have a case.

The “1099 misclassification lawsuit” is a law that defines independent contractors. The “1099 misclassification lawsuit” was settled for $1 billion in 2008.

Frequently Asked Questions

How much can I sue for misclassification?

A: The law allows for workers to sue their employers if they are being misclassified by the employer. This means that you can file a lawsuit against your boss and potentially recover lost wages, benefits, or damages.

Can an independent contractor sue for misclassification?

What is the federal penalty for an intentional misclassification of independent contractor?

A: The penalty for an intentional misclassification of independent contractor is usually a fine and/or imprisonment, but other penalties may apply.

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