Matco’s $15.8 Million Misclassification Deal

Matco Tools allegedly misclassified distributors of their products as independent contractors. An independent contractor is a self-employed individual or contracted entity that provides a service to another entity as a nonemployee. As such, Matco Tools did not have to provide employee benefits; which resulted in allegedly denying the distributor’s overtime pay, timely wages upon termination, meal breaks, rest breaks, reimbursement for business expenses, and accurate wage statements. John Fleming worked as a distributor for Matco Tools from 2012 to 2018. Fleming claims to have worked 20 hours of overtime each week, and alleges the company classified him as an independent contractor in order to avoid labor law requirements. He acquired an attorney to sue Matco Tools in 2019 and filed for class certification in October 2020. The class includes 273 franchisees who allege to have unpaid overtime hours as well as unpaid wages. Over a month later Matco Tools, urged the court not to certify the class, because Fleming did not accurately represent the class as a former franchisee. The company argued that his case was an “attorney-manufactured lawsuit.” In July, Judge Orrick said that the class size was manageable to seek civil penalties under the Private Attorneys General Act (PAGA) for hour and wage allegations. In Mid-December, Toolmaker Matco agreed to a 15.8 million dollar deal with the franchisees. Matco Tools will pay the class $13.5 million and relieve more than $2.3 million of debt, which will amount to an average of over $42,000 per class member.

How to tell if you are misclassified as an independent contractor?

Here are four signs:

• The employer determines your location, hours (including overtime), and how you execute your job.
  • The majority of independent contractors have the ability to decide how and when to accomplish their workload. If you’re working on an employer’s schedule and they determine how you do your job, you may be an employee.
• You do not have a set end date, but rather you are hired for an indefinite timeline.  
  • The majority of independent contractors are hired for a particular project that has a specific start and end date. So, if you do not have an estimated end date, then you may be an employee.
• Your equipment is supplied by the employer.
  • Independent contractors tend to supply their own equipment, since the entity hiring them does not need to reimburse the contractor for business expenses. If your employer is supplying your equipment, you may be an employee.
• Your job is indistinguishable from other full time employees.
  • If your job is the same in all facets to a full time employee, then you may be a misclassified employee.

If you are an employee misclassified as an independent contractor, you may be entitled to unpaid wages, overtime compensation, and more under labor law. Check out our infographic on the differences between employees and independent contractors to learn more!

 Seek Legal Assistance Today 

If you are misclassified as an independent contractor, seek legal assistance from the Working Solutions Law Firm, located in New York City and Livingston, NJ. Contact us today at (201) 500-3759 to schedule a free case evaluation and receive experienced legal counsel.  Our attorneys specialize in employment law, and can help advise employees on potential employer / employee disputes in New York and New Jersey. This may result in unpaid overtime and wages and other issues; our employment lawyers are based in New York, NY, and Livingston, NJ. Reach out for a free consultation today with an employment lawyer.