NFI agrees to $5.75M settlement to end wage suit

Update:

• National Freight has agreed to a $5.75 million settlement to resolve a nearly 10-year-old class action in which truckers claimed they were misclassified as independent contractors under New Jersey law.
• The class, certified in 2020, includes about 119 truckers who alleged National Freight illegally withheld wages through improper deductions from their pay.
• In 2022, the court ruled the drivers were employees, not contractors, and in April 2025, a judge determined they were entitled to recover the full amount of unlawful deductions.
• The net settlement amount of approximately $3.7 million will be distributed to class members, with average payments of $31,500 and more than $50,000 for long-term drivers.
• The NFI class action settlement was reached during a fifth mediation session and avoided a likely appeal by the company, which planned to challenge class certification and the application of New Jersey law.
  

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National Freight Inc. recently argued against class certification of truckers who claim they were denied employee classification and overtime compensation.

Plaintiffs in the class action claim that they should have been classified as full employees by National Freight but were instead denied this classification and the benefits associated with it – including overtime pay.

The truck drivers also claim that National Freight wrongly deducted insurance payments, fuel expenses, and other job-related costs from trucker paychecks. This allegedly violates the New Jersey Wage Payment Law.

Drivers for the company motioned for class certification last month, aiming to represent around 135 current and former drivers for National Freight who made deliveries to various Trader Joe’s locations in states on the East Coast.

National Freight Fights Back

National Freight recently argued against the certification of this Class, arguing that the plaintiffs do not have standing to bring claims on behalf of a Class under New Jersey law. According to National Freight, the drivers “spent most of their time driving in states other than New Jersey, did not work in New Jersey at all, [and] few, if any, lived in New Jersey or incorporated businesses here.”

“Named plaintiffs’ failure to address the fundamental choice-of-law issue, by itself, warrants denying class certification,” National Freight argued. “Even if this court attempts a choice-of-law analysis sua sponte (which it has no obligation to do), it will readily find individual issues overwhelm any common ones, both as to determining which states’ wage statutes apply and in attempting to apply the varying statutes in one case.”

When the plaintiffs motioned for class certification, they argued that the drivers were employees under the New Jersey Wage Payment Law. The motion referenced a June 2018 decision in which U.S. District Judge Jerome B. Simandle determined that New Jersey law applies when the claims, parties, and relationships in a class action are all connected to the state.

To note, in addition to federal labor laws, state laws do influence claims – California has some of the strictest laws to date protecting contract truck driver rights.

Who Is Entitled to Overtime Compensation?

Under the Fair Labor Standards Act (FLSA), workers classified as employees under the law are entitled to overtime pay – at least one and a half time their regular rate of pay for all hours worked over 40 hours in a single workweek.

Unfortunately, if a business does not classify their workers as employees, and instead classifies them as independent contractors, they are not required to pay overtime regardless of how many hours a worker clocks.

Employee misclassification is illegal and the Department of Labor notes that misclassifying employees causes “substantial losses to the federal government and state governments in the form of lower tax revenues.” However, because of the complicated overtime exemptions and laws for classifying employees, some workers may not realize that they are being misclassified by their employer.

The classification of truckers is often debated due to the control employers have over drivers’ work. Some drivers argue that, since trucking companies make important decisions about how and when a driver does their work, they are employees and not independent contractors.

The Overdraft Compensation Class Action Lawsuit is Case No. 1:15-cv-07908 in the U.S. District Court for the District of New Jersey.