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Matco Wage Theft Class Action Settlement Overview:
- Who: Matco Tools Corp. has agreed to a $15.8 million settlement with franchisees.
- Why: The franchisees claimed that the tools company wrongly classified them as independent contractors when they were employees, denying them the right to overtime pay and other benefits.
- Where: The settlement was filed in a California federal court.
Tool company Matco Tools Corp. has agreed to pay more than $15.8 million to its franchisees to settle class action claims it illegally classified them as independent contractors to get out of paying overtime and other legally required labor benefits.
The proposed settlement, filed in a California federal court Dec. 13, will see affected franchisees each getting more than $40,000 in cash and debt relief.
“The average net value of just the cash component of the settlement per class member will be nearly $35,000 each, and the average total net value (cash and debt relief combined) will be an average of over $42,000 per class member,” the franchisees said in the proposed settlement filing.
The deal comes after Matco franchisee John Fleming first sued the Ohio-based mechanic tools manufacturer and its parent company, Fortive Corp., in Jan. 2019.
Franchisee Claims He And Others Were Wrongly Classified As Independent Contractors
Fleming claimed that he and other Matco franchises had been wrongly classified as independent contractors by the company.
That allowed Matco to skimp on certain benefits required under California law, including paying overtime, giving meal and rest breaks and providing accurate wage statements and timely wages upon termination.
Fleming was a Matco franchise owner from 2012 to 2018. Matco argued to have the case tossed as Fleming is no longer a franchisee; however, the court did not agree and certified the class action lawsuit in February.
Matco will pay the class of about 273 franchisees $13.5 million and relieve more than $2.3 million worth of debt, court filings show. Attorneys are seeking $4 million in fees.
“The Settlement—the result of years of hard-fought litigation and extensive arms-length 10 negotiations—secures meaningful relief for the Class,” the plaintiffs said.
They said going to trial would be a risk for the class so it was preferential to settle before trial.
“This settlement avoids that uncertainty, while ensuring that class members receive substantial consideration now for a release of their claims,” they said.
Meanwhile, several trucking companies have been accused of federal labor law violations after allegedly misclassifying their long-haul truckers as independent contractors and exempt from employee legal protections. Click here to read more about how employee misclassification affects independent contractors in the trucking industry.
What do you think of this settlement with Matco franchisees? Let us know in the comments!
The class is represented by Valerie Jean Brender, Jessica Lee Riggin and Peter Rukin of Rukin Hyland & Riggin LLP; and Alex Michael Tomasevic, Craig McKenzie Nicholas and Shaun Andrew Markley of Nicholas & Tomasevic LLP.
The Matco Wage Theft Class Action Settlement is Fleming v. Matco Tools Corporation et al., Case No. 3:19-cv-00463, in U.S. District Court for the Northern District of California.
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3 thoughts onTool Company Matco Inks $15.8M Settlement to End Claims Franchisees Stiffed Out of Overtime, Breaks
Only in California. The same state that “timed out” my truck, forcing me into early retirement.
What about in ohio?
This is one of the reasons I had to file for bankruptcy after 6 yrs of being a “franchisee“. They run the company as soon if your employees but tell you your a franchisee and independent contractor but make you do things that only employees should do. Should be awesome if I could be part of that class action.