BOSTON — Franchisees of Coverall North America Inc. have reached a settlement with the custodial company in their class action wage and overtime pay lawsuit. The wage and overtime lawsuit revolved around whether or not the franchisees were employees or independent contractors under Massachusetts law. The parties reached this settlement just one week before the case was scheduled for arguments in the First Circuit Court of Appeals. Both the class of 166 franchisees and Coverall believe the settlement is in both of their best interests and have requested the case be returned to the district court to finalize the settlement process.
The Janitorial Franchise Claim
The plaintiffs are janitors hired as Coverall franchisees, who filed their initial lawsuit in February 2007. The franchisees alleged that they were employees of Coverall, not independent contractors. As employees, the franchisees claimed Coverall should have been required, under Massachusetts state law, to pay at least minimum wage and overtime pay when a franchisee worked more than 40 hours a week.
The franchisees alleged the company failed to satisfy the state’s “ABC Test” used to determine whether an employer hired an independent contractor or an employee. Under the “ABC Test” an employer must prove that the individual’s performance of services is free from the control and direction of the employer; the services are not a part of the employer’s usual course of business; and the individual typically performs the same or similar services as part of an independently established business.
Three years after filing, in March 2010, the court found Coverall to have failed the second requirement of the independent contractor test because the janitors performed essentially the same services as Coverall. In 2013, a district court judge ruled in favor of the franchisees, awarding them $4.8 million. In February 2014, Coverall claimed it was actually in the business of selling franchises, while franchisees were in the business of selling cleaning supplies. In January 2015, the parties agreed to settlement terms and requested the appeals court remand the case to district court.
Overtime Appeals
If an overtime wage claim goes to trial and the court renders a decision, that decision is not immediately final. Either side may appeal the decision, so long as the appeal is filed in a timely manner. In the case of Coverall, both sides appealed all of the many issues the district court judge had made a ruling on in the $4.8 million judgment. The settlement, if approved by the district court judge, is intended to resolve all of the issues raised in the appeal and counter-appeal.
If your employer has classified you as an independent contractor, yet treats you as an employee, you may have a wage and overtime pay claim. To discuss your situation, contact our team of overtime pay lawyers today at (855) 754-2795 or you may complete the Free Unpaid Overtime Case Review form. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.