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Hearst settles independent contractor rights class action for nearly $1 million

Hearst avoided a trial over claims it broke California laws in how it managed independent contractors delivering its newspapers.

SAN FRANCISCO (CN) — Hearst won a federal judge’s approval Thursday to pay $1 million to settle a class action claiming the news giant broke California laws and exploited contractors. 

The class action first filed by independent contractors Yolanda and Pablo Sanchez and Monica Tejada in 2020 originally demanded a jury trial. Plaintiffs said Hearst violated multiple state labor laws including failing to compensate contractors with minimum wage and overtime pay, reimbursement for business expenses or providing meal and rest breaks.

Hearst is the largest distributor of print news subscription products in Northern California, and the contractors say home newspaper delivery to subscribers is a major piece of the company’s enterprise. Plaintiffs say despite being independent contractors, Hearst demanded additional services outside of their contracts and specified delivery hours. 

Plaintiffs said that for work they had to drive, maintain, insure and fuel their own vehicles, and use their own cellphones, without compensation. They also worked shifts without uninterrupted lawful meal and rest breaks at the appropriate times.

Hearst has faced similar class action claims from workers multiple times in the last decade, including from more than 3,000 former unpaid interns whose unfair labor practices suit was thrown out in 2016. 

After years spent in litigation, this past December U.S. District Court Judge Vince Chhabria granted preliminary approval of the $950,000 settlement on behalf of the plaintiffs and 56 class members. 

In court Thursday, Chhabria granted final approval of the settlement and the motion for attorney’s fees.

The agreement includes service payments of $15,000 each for Pablo Sanchez and Violet Alvarez for their time and personal risks, attorneys’ fees of up to 35% of the settlement or $332,500 and litigation costs up to $40,000.

Class members will receive an average pre-tax award of over $9,280, and any undeliverable awards will go to the East Bay Community Law Center in Berkeley. 

Chhabria said he agreed that the usual 25% benchmark for attorneys’ fees was not enough in this case, saying 35% was appropriate given the “significant recovery achieved for class members.” 

“I think it’s important in a case like this to think about incentives,” Chhabria said. 

However, the judge withheld 10% in administration fees, given what he said were a number of mistakes made throughout litigation of the case. 

“There have been times when I will get the final accounting and I say no, because there’s been an issue with the administration of the case,” he said, which attorneys agreed with. 

“We’re pleased with the court’s thoughtful words of appreciation for this strong settlement and the relief it provides for the hardworking class members,” Jahan Sagafi, attorney for the plaintiffs, said in an email. 

Attorneys for Hearst did not respond to a request for comment before press time.

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