The Urethane Blog

Truck Driver Ruling

A trucking giant quietly agreed to shell out $28 million to its truck drivers — and it could be a ‘wake-up call’ for how the industry pays them

Rachel Premack Jul 23, 2020, 1:50 PM

truck driver
The Supreme Court handed truck drivers a big win last year.
  • A Missouri-based trucking giant is settling two class-action suits with its truck drivers, offering $28 million.
  • One of the cases against New Prime Inc. went all the way to the Supreme Court.
  • Experts say the case and its settlement could set a precedent for truck drivers who say their companies aren’t paying fair wages.
  • Truck drivers at companies like Walmart and PAM Transport have recently sued for the right to be paid for every hour on the road.
  • Visit Business Insider’s homepage for more stories.

After a years-long court battle that went all the way to the Supreme Court, a Missouri-based trucking giant is settling two class-action suits with its truck drivers, said a court filing from Monday.

Up to 26,000 current and former drivers are eligible for a $28 million payout from New Prime Inc., known as Prime, the filing said.

Both of the class-action suits — Oliveira v. New Prime and Haworth v. New Prime — involved truck drivers for Prime who said they were not fairly paid. A case filed by a truck driver named Dominic Oliveira went all the way to the Supreme Court, which unanimously sided with Oliveira.

The ruling from the nation’s highest court concerned Prime’s ability to settle its dispute with Oliveira through arbitration. The Court ruled in favor of Oliveira, which also had wide-ranging implications for how drivers are paid.

“We are proud of how we treat all of our associates, and we work hard to get it right,” Prime’s general counsel, Steve Crawford, wrote in an email to Business Insider. “Nevertheless, we decided that moving past this litigation was the right thing to do.”

The core issue in both cases stemmed from a decades-old practice in the trucking industry in which drivers are paid per mile, not hourly or annually. Oliveira argued that he deserved to be paid at least the minimum wage.

Truck drivers spend weeks on the road for work and hours every day doing nondriving work tasks. In one 2016 survey, almost 63% of truck drivers said they waited at least three hours every time they were at a shipping dock. This waiting time typically goes unpaid.

The US Department of Labor says that “any work which an employee is required to perform while traveling must, of course, be counted as hours worked.”

An emerging trend in favor of the truck drivers

Experts say the case and its massive settlement could set a precedent for truck drivers who say their companies aren’t paying fair wages. Cathy Roberson, the president of the research firm Logistics Trends & Insights, said this may create a path for truck drivers who have documented evidence of unpaid work to fight for back pay in court.

“It could tip the scale in favor of the driver,” Roberson told Business Insider. “For those that do potentially launch action against a trucking firm, a precedent has been set already and they could refer to this.”

She added that “in a way, it’s almost like a wake-up call.”

America’s $800 billion trucking industry relies on owner-operators, who own their trucks and may be contracted with certain companies. About 350,000 to 400,000 of the nation’s 1.9 million truck drivers are owner-operators.

Like most trucking companies, Prime classifies its owner-operators as contractors — and therefore not privy to certain worker protections. The Supreme Court ruled in its unanimous opinion last year that Prime’s owner-operators were indeed employees.

“Considering the continuing efforts of mega-carriers to thwart the rights of drivers, the decision is an important one for protecting the rights of interstate drivers to have their claims heard publicly and in a collective fashion,” Justin Swidler, an employment-law attorney who often represents truck drivers, told Business Insider after the Supreme Court ruling.

Crawford said Prime believes its business model is “completely lawful.” The court case “primarily dealt with a challenge to the independent contractor business model for truckers,” Crawford wrote in an email.

“The independent contractor has been a long standing piece of our company and trucking in America,” Crawford said. “We believe that our business model is completely lawful and compliant with all regulations while providing drivers the opportunity to earn, based on their own efficiency and productivity, excellent compensation.”

It’s the latest legal action to push the boundaries of a question recently haunting America’s courts: whether truck drivers deserve minimum wage for nondriving duties.

A federal court in California told Walmart in January that it owed its California truck drivers $54.6 million. The opinion said Walmart violated the law when it didn’t pay truck drivers for rest breaks and other nondriving time.

In October 2018, a federal court in Arkansas decided in a class-action suit against PAM Transport that drivers should be paid for every hour they spend in their trucks while not sleeping — 16 hours a day of at least minimum-wage pay.

In 2017, a Nebraska court said Werner Enterprises, a trucking giant accused of pay-practice violations, must pay $780,000 to 52,000 student truck drivers. In 2016, another major carrier, C.R. England, paid $2.35 million in back wages to more than 6,000 drivers.