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Lowe's offers $6.5M settlement over use of independent contractors


Lowe's Home Centers L.L.C. has offered to pay a $6.5 million settlement in a federal class action lawsuit that alleged the retailer misclassified thousands of home installation workers as independent contractors and, in turn, denied them workers compensation coverage and other benefits due to Lowe's employees in California.

Lowe's “strongly” denies any wrongdoing in Ronald Shephard et al. v. Lowe's HIW Inc. et al., according to the settlement agreement filed May 23 in U.S. District Court in Oakland, California. A hearing has been requested for June 27 to seek preliminary approval of the settlement agreement.

Mr. Shephard, who sued Lowe's in June 2012, installed garage doors on behalf of Lowe's between 1995 and 2009, court records show. He and other plaintiffs argue that by classifying them as independent contractors rather than employees, Lowe's failed to provide them with benefits such as health insurance, basic term life insurance, a 401(k) savings plan and workers comp insurance.

Mr. Shephard and other members of the settlement class contended that Lowe's should have considered its installers to be employees, rather than contractors, under California labor law because it “had the right to control the performance of the installers' work” and because it “supplied many of the materials and the place of work” for installers, among other reasons, according to court filings.

Workers who would be eligible for the settlement must declare that “he or she performed installation work on at least one Lowe's installation job in California” since June 15, 2008 and that “he or she was a principal of or classified as a W-2 employee of an installation company that performed installation services for Lowe's,” the agreement reads.

Lowe's estimates that about 4,029 installers and 949 installation companies would be eligible for payments under the settlement agreement.