Prime Settles with Drivers for $28m – the Start of Big Changes?

A years-long court battle that escalated to involve the Supreme court was finalized by a Missouri-based trucking giant settling in two class-action suits with its truck drivers. Details of the proceeds were included in a court filing from Monday.

The court battle resulted in 26,000 current and former drivers becoming eligible for a $28m total payout from New Prime Inc., also known as Prime. 

Any driver who has worked for Prime both as a company driver or an owner-operator, in the period from March 4, 2010, to May 8, 2020, could be eligible to receive a part of the $28m settlement.

Both class-action suits involved truckers from Prime who argued they weren’t being paid fairly. The class-action lawsuits, Oliveira v. New Prime, and Haworth v. New Prime, was resolved with a $28m settlement. The Oliveira v. New Prime case filed by a trucker named Dominic Oliveira went all the way up to the Supreme Court, which without question sided with the Plaintiff.

The Nation’s Highest Court voiced its concerns about Prime’s ability to settle the dispute with Oliveira through arbitration, which was in the original draft of the contract between the Plaintiff and the defendant. Many experts say that arbitration, as opposed to court with a jury, benefits the company while harming workers.

The Court ruling in favor of Oliveira might have enormous implications for the way drivers are paid and might be the start of significant changes in the industry. 

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

This settlement decision may have a significant impact on the way truckers are being paid. For years now, there have been voiced concerns about cost-per-mile being a massive problem for the industry. In the class-action suit Oliveira v. New Prime, Oliveira argued that he deserved at least a minimum wage for his work.

Throughout their career, truckers spend weeks on the road and work for prolonged hours every day doing tasks that aren’t driving but are still a part of the job. The CPM model is less than ideal for this type of work. Truckers have repeatedly voiced that they aren’t getting paid when they are not driving during work hours. A 2016 survey showed that 63% of truckers said they wait for at least three hours each time they were at a shipping dock. And this wait time, which is included in their daily HOS quotas, goes unpaid. 

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

The Final Nail in the Coffin for CPM Pay?

According to experts, this case and its resulting settlement can give the grounds for other truckers who have documented work they haven’t been paid for to get their due in court.

The president of the research firm Logistics Trends & Insights, Cathy Roberson, has said the following, “It could tip the scale in favor of the driver. For those that do potentially launch action against a trucking firm, a precedent has been set already and they could refer to this.”

Any trucker who has proof that a trucking company owes them money for their work can file a case in court, and use this settlement as a precedent toward winning the case.

The funds are allocated to cover all classes of drivers working for Prime in the following way:

  • $7,000,000 in non-reversionary funds to resolve the claims relating to unpaid classroom orientation;
  • $3,500,000 in non-reversionary funds and $5,000,000 in claims-made funds to resolve the claims relating to B seat or C seat driving;
  • $3,500,000 in non-reversionary funds and $5,000,000 in claims-made funds to resolve the claims relating to employee A seat (post final/upgrade orientation) driving;
  • $4,000,000 in claims-made funds to resolve the claims relating to independent contractor driving (i.e., driving while classified as an independent contractor.)

Up to 33% of the total $26m will go to attorney fees to Plaintiff’s counsel. $50,000 will go for Oliveira, and $25,000 will go for the Plaintiff in the Haworth v New Prime case, Rocky Haworth.