A federal judge approved about a $1 million settlement of a class action lawsuit claiming the news giant Hearst violated California Labor Code provisions and exploited contractors who were involved in the distribution of the San Francisco Chronicle and other news media.

The class action claims were filed in July 2020 by independent contractors Yolanda and Pablo Sanchez and Monica Tejada in the United States District Court Northern District of California. They were employed by Hearst as newspaper dealers in and around Burlingame, Hillsborough, and San Mateo, California, from 2012 until October 21, 2018.

Hearst has a principal office in San Francisco County and is engaged in the ownership, management, and operation of the San Francisco Chronicle newspaper. It 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.

Hearst, through the workers it hires as independent contractors, distributes the San Francisco Chronicle, as well as the New York Times, the Wall Street Journal, the East Bay Times, the San Jose Mercury News, the Sing Tao Daily, the World Journal, the Korea Times Daily, Barron’s, and the Financial Times.

The plaintiffs claim that they were misclassified as independent contractors. The complaint claims that under “conventional legal, and economic tests, Plaintiffs’ and the Class Members’ relationship with Hearst was that of an employee and not of an independent contractor. Because Plaintiffs and the Class Members were and/or are employees and not independent contractors, numerous California Labor Code violations have occurred and/or are occurring.”

Plaintiffs were paid piece rates for delivering different newspapers that did not vary based on their hours worked. For example, Plaintiff Yolanda Sanchez was paid $.16 for each delivery of the NY Times, San Francisco Chronicle and Financial Times, and $.10 for each delivery of USA Today. Further, Plaintiff Pablo Sanchez was paid $.22 for each delivery of the NY Times, San Francisco Chronicle, USA Today, Financial Times, and his piece rates ranged from $.10 to $.38.

Yolanda Sanchez worked approximately ninety-one hours per week, Pablo Sanchez worked approximately seventy-five (75) hours per week, Monica Tejada worked approximately forty-four to fifty hours per week and the three alleged that they received less than the applicable minimum wage.

Hearst allegedly demanded additional services outside of the contracts and outside of the delivery hours specified in the contracts for which Plaintiffs were required to remain on-call and subject to Hearst’s control. For example, Hearst required re-delivery of missing, damaged, or stolen products.

The plaintiffs accused the company of “Failing to compensate Class Members for all hours worked, failing to compensate piece rate employees for rest and recovery periods and other non- productive time, failure to provide Class Members with meal periods and rest periods, failure to provide Class Members with minimum and overtime wages, failing to maintain accurate and complete employment records, failure to provide Class Members with accurate, itemized wage statements, failure to reimburse Class Members for business expenses, and failure to timely pay all wage earned.”

Plaintiffs also alleged that these acts, “which violate the California Labor Code, constitute unlawful and unfair business practices in violation of the California Unfair Competition Laws.”

After several years of litigating this case, this month U.S. District Court Judge Vince Chhabria granted approval of the $950,000 settlement on behalf of the plaintiffs and 56 class members. The Judge approved 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.

The 56 class members include all persons who have entered into written contracts with Hearst solely pursuant to a home delivery agreement in the State of California regarding newspapers, including, but not limited to, the San Francisco Chronicle, at any time from July 27, 2016, through the date of the Preliminary Approval Order entered by the Court, and who do not submit a timely and valid Opt Out.

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. Courthouse news reported that the Second Circuit Court of Appeals heard that case in tandem with another lawsuit against the makers of the movie “Black Swan.”  Under the standards set in the “Black Swan” case, Glatt v. Fox Searchlight 811 F.3d 528 (2015), interns do not have to be paid if they receive “educational and vocational benefits” through “hands-on” job experience. The federal judge assigned to the Hearst case found that the Hearst interns fit this description and threw out their lawsuit.

Hearst Resolves 56 Misclassified Employee Class Action for $1M