AB5 Lawsuit Settlements for Truckers: XPO, Ryder, and Port Cases

Truckers in California have recovered substantial sums through AB5-related misclassification lawsuits and settlements, with the largest payouts coming from XPO Logistics (roughly $30 million in 2021 and $16.5 million in 2019), a $5 million class settlement from port trucking company QTS, a $1.2 million wage theft award against K&R Transportation, and a first-of-its-kind $868,128 enforcement citation issued jointly against Costco, Ryder Last Mile, and Mega Nice Trucking in October 2025. Several of the biggest settlements predate AB5 but rest on the same misclassification theory the law now codifies, and the 2025 Costco action appears to be the first trucking-specific enforcement case brought under AB5 itself.

The Costco, Ryder, and Mega Nice Citation (2025)

In October 2025, the California Labor Commissioner’s Bureau of Field Enforcement jointly cited Costco Wholesale Corporation, Ryder Last Mile Inc., and Mega Nice Trucking LLC for $868,128 in penalties.1California Department of Industrial Relations. DIR News Release 2025-111 About $663,000 of that total was designated for the 58 delivery drivers affected.2FreightWaves. Likely 1st AB5 Trucking Enforcement Action in California Snags 3 Companies

Mega Nice Trucking, based in Chula Vista, had subcontracted with Ryder Last Mile to supply drivers for Costco deliveries. Investigators concluded that Costco and Ryder controlled driver schedules, uniforms, protocols, and performance monitoring, which established a joint employer relationship making all three companies equally liable.3KQED. California Regulators Fine Costco More Than $800K for Drivers Owed Wages The cited violations included unpaid minimum wages, unpaid overtime, and failure to provide meal and rest breaks. Regulators also found that violations continued even after the drivers were nominally reclassified as employees in 2023, pointing to flat daily pay rates and falsified payroll records.1California Department of Industrial Relations. DIR News Release 2025-111 All three companies have appealed.

This action matters for drivers because it signals how California now investigates subcontracted trucking arrangements. A shipper that writes the rules and a logistics intermediary that enforces them can be held responsible alongside the small carrier that nominally employs the driver.

XPO Logistics: The Largest Trucker Settlements

XPO Logistics, which runs last-mile delivery and port drayage operations, has paid out tens of millions in misclassification cases involving California drivers.

In 2019, a federal judge granted preliminary approval to a $16.5 million settlement in a 2016 class action covering 847 plaintiffs. The drivers alleged XPO misclassified them as independent contractors to avoid proper wages and benefits. The average estimated payment per driver came out to roughly $14,200. In an earlier related case, a federal judge had already ordered XPO to pay drivers $958,660.4Supply Chain Dive. $16.5 Million Settlement XPO Misclassification Suit

In October 2021, XPO reached preliminary settlements totaling nearly $30 million covering 784 current and former port drivers at XPO Cartage and XPO Port Services. The class claims dated back to 2013 and alleged willful misclassification, failure to reimburse truck-related costs, and sub-minimum-wage pay. XPO denied liability as part of the settlement.5Trucking Dive. XPO Settles With California Drivers

Port Trucking and Other Notable Payouts

Southern California’s port drayage sector has produced misclassification claims for years, well before AB5 became law. The pattern in these cases looks a lot like what the ABC test now presumes: drivers hauling for a single carrier, under its control, treated as independent businesses on paper only.

Between January 2022 and October 2025, California’s Bureau of Field Enforcement issued more than 2,200 citations for labor law violations across all industries, recovering over $48.4 million.1California Department of Industrial Relations. DIR News Release 2025-111 The trucking share of that total is a share of a growing pool.

Why AB5 Keeps Producing Trucker Claims

AB5 writes the ABC test into California statute. Under that test, a worker is presumed to be an employee unless the hiring company proves all three of these things: the worker is free from the company’s control (Prong A); the worker performs tasks outside the company’s usual business (Prong B); and the worker is independently engaged in the same trade (Prong C).9California Franchise Tax Board. Worker Classification and AB 5 FAQ

Prong B is where trucking companies get stuck. A motor carrier’s business is moving freight, and owner-operators move freight, so proving the driver’s work falls “outside the usual course” of the carrier’s business is close to impossible.10Everee. AB5 Trucking The industry received no exemption, and roughly 70,000 independent truckers in California were put at risk of losing their independent contractor status.11American Trucking Associations. AB5: What We Know About CA’s Independent Contractor Statute Misclassification can bring fines of up to $25,000 per employee. That structural mismatch is what keeps generating claims and settlements.

What Misclassified Drivers Have Been Able to Recover

The settlements and citations above cluster around a consistent set of categories. If you believe you have been misclassified, these are the kinds of losses that have driven awards in actual cases:

  • Unpaid minimum wages and overtime.
  • Unpaid meal and rest break premiums.
  • Reimbursement for truck-related expenses the driver absorbed as a supposed independent contractor.
  • The difference between a flat daily rate and lawful hourly pay.
  • Penalties for willful misclassification and for falsified payroll records.

When a driver is reclassified as an employee, the carrier also becomes responsible going forward for workers’ compensation, health insurance, and expense reimbursement, in addition to wages and overtime.12IADC. Through the Looking Glass A nominal reclassification without changes to pay practices, as the Costco case shows, does not shield a company from liability.1California Department of Industrial Relations. DIR News Release 2025-111

Where the Litigation Stands Now

The industry’s attempts to block AB5 through federal preemption have run out of room. The California Trucking Association won an early injunction in 2020, but the Ninth Circuit reversed in April 2021, and the Supreme Court denied review on June 30, 2022, allowing enforcement against trucking to begin.13United States Court of Appeals for the Ninth Circuit. California Trucking Association v. Bonta, Nos. 20-55106, 20-5510714U.S. Supreme Court. Docket for California Trucking Association v. Bonta, No. 21-194 A second challenge by the CTA and the Owner-Operator Independent Drivers Association was rejected in March 2024, and the Ninth Circuit upheld that ruling on May 16, 2025.15Office of the Attorney General, State of California. Statement Attorney General Bonta Regarding United States Court of Appeals Ninth OOIDA said it was “disappointed with this news and assessing options,” with en banc review or another Supreme Court petition the only remaining paths, both regarded as long shots.16FreightWaves. OOIDA’s Fight Against AB5 in California Dealt Another Loss

For drivers, the practical consequence is that AB5 is here and enforceable. Private class actions have been the dominant recovery vehicle so far, and the Costco citation suggests the Labor Commissioner is now pursuing enforcement in parallel. Similar legislation is reportedly being considered in roughly 22 other states, which could expand this type of claim beyond California.17Truckstop. California’s AB5 Law If you drove in California as an independent contractor for a motor carrier whose business is hauling freight, the settlements above show both the theory of liability and the dollar range of what drivers in similar positions have recovered.