USPack Logistics LLC and couriers who say it misclassified them as independent contractors when they were really employees reached a settlement worth $2.85 million, ending their wage-and-hour dispute.

The deal follows almost eight years of litigation, much of it focused on the courier company’s efforts to have the case kicked out of federal court and sent to arbitration instead, according to the preliminary settlement approval request the workers filed in the US District Court for the District of New Jersey.

The workers allege the USPack misclassification deprived them of the greater wage-and-hour protections employees enjoy under state law, such as ...

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