STG Logistics will pay $2.2 million to drayage drivers in New Jersey as part of a settlement resolving a worker misclassification case. The total cash payout is $2.775 million, with the remaining $555,000 going to the state for penalties and contributions to unemployment and disability funds. The overall settlement is valued at over $80.9 million, but most of that amount will be wiped out through STG's recently concluded Chapter 11 bankruptcy, which cut its debt by 90%. The driver payments are classified as priority claims under the bankruptcy code, ensuring they are compensated ahead of other creditors. The case, first filed in 2023 under a 2021 law, alleged that STG and its predecessor XPO Logistics misclassified drivers as independent contractors, violating New Jersey's ABC test by exerting significant control over their work.
XPO Logistics IncXPO Logistics is mentioned as the predecessor that allegedly misclassified drivers, but the settlement is with STG, so impact is indirect and negative.
STG Logistics settles misclassification case, paying $2.2 million to drivers and $555,000 to state, with total settlement valued over $80.9 million.