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June 26, 2018 3:00 PM, EDT

PepsiCo Agrees to Pay $5 Million to Settle California Drivers’ Work Break Lawsuit

Luke Sharrett/Bloomberg News

PepsiCo Inc. and related companies agreed to pay $5 million to settle claims that drivers didn’t receive breaks required by California law.

About 1,800 current and former drivers in the Golden State will share the payout, according to their motion for court approval. If every class member participates in the settlement, each driver would receive about $1,990, the motion estimates.

PepsiCo ranks No. 1 on the Transport Topics list of the 100 largest private carriers in North America.

California requires employers to provide rest breaks and meal breaks. Workers are supposed to be free of work duties during their breaks.

But the drivers weren’t free of duties because they were expected to respond to telephone calls from dispatchers and customers, they say. As a result, they should be compensated for that time, according to the lawsuit. They also said their pay stubs and other records were incorrect as a result of the incorrect compensation.

If the drivers were to win all claims in a trial, the companies’ maximum liability would be about $7 million, the drivers estimated. The parties said they agreed to settle to avoid the risks, costs and delays of litigation.

New Bern Transport Corp. and Pepsi-Cola Sales and Distribution, Inc., which are subsidiaries of PepsiCo., also are named as defendants.

The proposed settlement is subject to approval by Judge Edward M. Chen of the U.S. District Court for the Northern District of California. He’ll consider whether it’s a fair, adequate and reasonable resolution of the dispute, taking into consideration the strength of the claims, the amount of the payout and the reaction by class members.

William Turley, David Mara, and Jamie Serb of the Turley & Mara Law Firm in San Diego represent the drivers.

Samantha Hardy, Ashley Hirano, and Daniel De La Cruz with Sheppard, Mullin, Richter & Hampton in San Diego represent PepsiCo and the subsidiary companies.