MASON, Ohio — Cintas Corp. has reached a settlement agreement in principle to pay approximately $24 million to resolve a 2003 class-action lawsuit that alleges it failed to pay its drivers overtime.
Veliz vs. Cintas Corp. alleges Cintas misclassified thousands of route drivers as exempt employees in order to avoid paying overtime required by state and federal laws, according to Workers United, a laundry workers union.
“Cintas does not believe the allegations had merit but decided to resolve the claims through mediation to avoid the additional expense of protracted litigation,” Scott Farmer, Cintas CEO, said in a prepared statement. “The company’s focus is to move forward with business and servicing our customers, and we are confident the resolution of claims helps us maintain the strong relationships we have with our partners.”
“After six long years of delay tactics and needless posturing by Cintas, drivers will finally receive just compensation for overtime work performed that was wrongly withheld,” says Bruce Raynor, president of Workers United.
A framework for allocating the funds is still being worked on, Workers United says.
Cintas says the case is one of several filed by UNITE HERE and the Teamsters in an effort to pressure Cintas into a card-check neutrality agreement. Cintas says it will continue to protect its employees’ rights to decide if they want to be unionized.
Cintas expects the court approval process to take several months. A one-time charge of approximately $12 million net of insurance proceeds and taxes is anticipated.
Have a question or comment? E-mail our editor Matt Poe at [email protected].