Hundreds of port drayage drivers in New Jersey are finally getting paid. STG Logistics — together with STG Drayage and other subsidiaries — has agreed to a $2,775,000 settlement with the State of New Jersey over drivers who hauled intermodal freight out of Newark as "independent contractors" while the company controlled nearly every detail of their work. It is the first case the state has ever brought under its 2021 law allowing New Jersey to sue employers directly for misclassification.
The deal, in numbers
$2.22 million goes to drivers as back wages
$555,000 goes to the state — wage-and-hour penalties plus contributions to unemployment and disability funds
A further $7.5 million penalty hangs over STG if it violates the settlement terms
"Hundreds" of drivers are covered; the state has not released an exact headcount or per-driver amount yet
The case has a long tail. New Jersey opened its investigation back in 2019 into XPO Logistics' intermodal operation on Wilson Avenue in Newark. When STG bought XPO's New Jersey intermodal and drayage business in 2022, it contractually assumed liability for those employment practices — which is how a company that didn't run the operation in 2019 ended up writing the check in 2026. The state filed suit in Superior Court in December 2023, and the settlement was announced on July 29.
Why 'independent' didn't hold up
Under New Jersey's ABC test, calling a driver a contractor doesn't make it so. The state pointed to the usual tells of employee-level control: required company branding on trucks, equipment leased exclusively through the company, GPS tracking, assigned routes and rates, non-negotiable contractor agreements, and restrictions on working for anyone else. That pattern — contractor on paper, employee in practice — is exactly what the ABC test exists to catch.
“ This settlement will ensure that hundreds of workers will finally receive money they are rightfully owed. ”
The bankruptcy twist
STG filed for bankruptcy earlier this year — which would normally push drivers to the back of a long creditor line. Instead, the settlement was structured with priority status under the bankruptcy code, so drivers get paid ahead of other creditors. For drivers owed money by any carrier that goes under, that structure is the precedent worth remembering.
The bigger fight over who counts as an employee
The STG case lands in the middle of a widening split. In February, the U.S. Department of Labor proposed rescinding the 2024 independent-contractor rule and reverting to a looser federal standard. But federal rules don't preempt stricter state tests — and states like New Jersey and California are moving the other way, actively litigating misclassification in trucking. For context on scale: the largest trucking misclassification settlement on record remains Swift Transportation's agreement of up to $100 million covering roughly 20,000 drivers, settled back in 2019. New Jersey's message with its first 2021-law enforcement action is that the state route now has teeth of its own.
“ The message is clear: New Jersey will use every tool at our disposal to protect workers. ”
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