Delivery drivers who say EatStreet Inc. improperly used their tips to meet minimum wage obligations may move forward with a $1.24 million deal resolving the dispute, a federal judge in Wisconsin said.
The latest settlement clarifies state-law class and Fair Labor Standards Act collective definitions and adequately demonstrates fairness, fixing problems that caused the US District Court for the Western District of Wisconsin to reject the parties’ earlier attempt at a deal.
The drivers also accuse the food delivery platform of failing to reimburse them for vehicle and mileage expenses. It’s “evident” from the numerous case filings that the suit “presents contested and unsettled issues about the application of federal and state labor laws to the ‘gig economy,’” Chief Judge James D. Peterson said.
The original class and collective definitions referred to an exhibit listing individual members, but didn’t explain who was on the list, how they were identified, and whether the groups included anyone not on the list, Peterson said. The old version also failed to explain why the definitions were “worded differently” and whether there was any “substantive difference.”
The new definitions include more information and “clearly define the class and collective with objective criteria,” according to the Thursday opinion.
The FLSA collective consists of all delivery drivers who worked for EatStreet in Wisconsin between March 26, 2017, and June 19, 2021, and didn’t sign arbitration agreements. It includes drivers who already opted to join the collective. The state-law class consists of drivers who worked for the company in Wisconsin between March 26, 2018, and June 19, 2021, and didn’t agree to arbitrate.
“One remaining concern is that the court has been unable to determine which individuals have already opted in,” Peterson said. The parties need to specify who’s in the FLSA collective when they seek final approval, and if anyone consented to join but isn’t in the collective, they need to explain why those drivers aren’t included, the order said.
Peterson previously asked the parties to explain how the deal compares to potential recovery at trial and what damages are attributable to which liability theories. They’ve “now provided enough information for the court to conclude for the purpose of preliminary approval that the settlement is fair and adequate,” the order said.
The deal also includes more than $413,000—about one third of the total settlement amount—in attorneys’ fees for Hawks Quindel SC, counsel to the drivers.
Michael Best & Friedrich LLP represents EatStreet, which denies the workers’ allegations.
The case is Martin v. EatStreet Inc., 2022 BL 429524, W.D. Wis., No. 3:20-cv-00279, preliminary settlement approval 12/1/22.
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