STG Logistics has reached an $80.9 million settlement agreement to resolve a legal dispute in New Jersey concerning the misclassification of drayage drivers. The litigation, which began in 2023, centered on accusations that the company wrongly categorized full-time staff as independent contractors. While the total value of the settlement is significant, the actual cash payout to drivers is capped at $2.2 million. An additional $555,000 will be directed to the state of New Jersey to cover penalties and contributions to unemployment and disability funds.

According to FreightWaves, the majority of the $80.9 million agreement is expected to be absorbed by the company’s recent Chapter 11 bankruptcy proceedings, which effectively canceled a large portion of its debt load. Despite this, state officials have designated the funds earmarked for drivers as a 'priority' debt, ensuring that workers receive compensation before other creditors. Eligibility for the payout is determined by earnings records dating back to January 1, 2017. Furthermore, the settlement includes a contingent clause requiring an additional $7.5 million payment from STG Logistics should the company fail to meet specific ongoing obligations outlined in the agreement.

This legal resolution arrives as New Jersey prepares to codify the 'ABC test' for worker classification on October 1, a development that has heightened scrutiny among regional carriers. The case itself holds historical significance, as it represents the first major legal action brought by state authorities under a 2021 statute designed to aggressively pursue employers accused of misclassifying employees. As the industry watches, the resolution serves as a stark reminder of the financial and legal risks associated with labor classification practices in the logistics sector.