The New Jersey Department of Labor and Workforce Development, together with the Office of the Attorney General, announced on Mar. 12 a $7 million settlement with PDX North, Inc., resolving a long-standing case involving worker misclassification of delivery drivers.
The agreement is significant because it addresses the issue of workers being classified as independent contractors rather than employees, which can deprive them of key benefits and protections. The settlement requires PDX to reclassify over one thousand delivery drivers as employees and comply fully with state wage, benefit, and tax laws by January 1, 2027.
Attorney General Jennifer Davenport said, “Misclassifying workers raises costs for workers, taxpayers, and law-abiding businesses, which many of them can hardly afford. Combating worker misclassification is a critical part of our efforts to make our state more affordable for all New Jerseyans. Through close collaboration with the New Jersey Department of Labor and Workforce Development, we secured a resolution that holds PDX accountable for its misconduct. PDX has now reclassified its drivers as employees to comply with our labor laws, ensuring that workers receive the protections they deserve.”
Acting Labor Commissioner Kevin D. Jarvis said, “This settlement reflects New Jersey’s strong commitment to protecting workers and ensuring employers meet their legal obligations. Worker misclassification denies employees critical benefits and protections and undermines fair competition for businesses who follow the law. By restructuring how it operates, PDX is demonstrating a true commitment to following the Garden State’s worker protection laws.”
The case resolves four audits conducted between 2006 and 2019 that found PDX had improperly classified its drivers in violation of unemployment compensation and temporary disability benefits laws. The original assessments totaled nearly $7.9 million in unpaid contributions, interest, and penalties. After legal proceedings in both administrative courts and federal court—including an unsuccessful appeal by PDX to the United States Supreme Court—the parties reached a settlement requiring an initial payment of $5 million by March 5, 2026. An additional $2 million in suspended penalties will not be due if PDX meets all compliance terms through January 1, 2029.
PDX must now pay into state unemployment compensation funds immediately and ensure ongoing compliance through regular audits by NJDOL. This outcome follows similar settlements obtained by state authorities in other transportation cases involving worker misclassification.
According to the official website, the New Jersey Attorney General Matthew Platkin aims to protect residents’ lives and property while upholding legal standards across all counties in New Jersey. The office influences public safety through enforcement oversight statewide under its statutory mandate according to its official website. Services provided include legal representation for the state government as well as consumer protection initiatives according to the official website.
The broader impact of this settlement may encourage other companies in similar industries to review their employment practices for compliance with state labor laws.