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Drata Inc. has agreed to pay $1.3 million to settle a class action lawsuit alleging it misclassified Sales Development Representatives (SDRs) as exempt employees, leading to unpaid overtime, missed meal and rest breaks, and unreimbursed business expenses.
If you worked as a Sales Development Representative for Drata Inc., you may be eligible to receive a direct cash payout from a $1.3 million class action settlement. The agreement resolves legal allegations that the compliance automation software company misclassified its sales representatives as exempt workers, leading to unpaid overtime wages, missed meal and rest breaks, and unreimbursed business expenses.
The lawsuit alleges that Drata Inc. improperly classified its Sales Development Representatives (SDRs) as exempt from federal and state wage laws. Under overtime laws, non-exempt employees must receive additional pay when working more than 40 hours in a single workweek or more than eight hours in a single day in states like California.
Plaintiffs in the case claimed that Drata’s misclassification resulted in multiple labor code violations. Specifically, the suit alleged that sales development representatives routinely worked extra hours without receiving proper overtime pay, were deprived of compliant meal and rest periods, received inaccurate wage statements, experienced delayed final wage payments, and were forced to pay out-of-pocket for necessary business expenses without reimbursement.
Drata Inc. denies all allegations of wrongdoing and maintains that it properly classified its workers in full compliance with employment laws. The corporate software provider agreed to the $1.3 million settlement strictly to avoid the rising costs, operational distraction, and unpredictable risks associated with prolonged trial litigation.
The settlement establishes two distinct groups of current and former workers based on employment location and applicable labor laws. Because the administrator will verify eligibility using Drata’s internal corporate payroll records, qualifying workers have already been identified.
You may be eligible for a financial recovery if you fall into one of these two settlement categories:
California Settlement Class: All individuals employed by Drata Inc. as Sales Development Representatives within the state of California from May 1, 2021, through September 1, 2025.
Settlement Collective (Outside California): All individuals employed by Drata Inc. as Sales Development Representatives anywhere else within the United States (excluding California) from June 11, 2021, through September 1, 2025.
The settlement also allocates $22,600 to resolve statutory claims under the California Private Attorneys General Act (PAGA), providing dedicated monetary distributions to California workers who completed pay periods between June 11, 2023, and September 1, 2025.
The total $1.3 million settlement fund will be divided among all eligible class members based on their total compensation, job title, and total workweeks recorded during the settlement window. Because California state labor code provides extensive statutory penalties for rest break and overtime violations, California class members are expected to receive higher relative per-week recovery rates than employees located in other states.
The settlement fund structure incorporates a protection for class members: if payroll review reveals that the total combined eligible workweeks exceed the administrator’s initial estimate of 4,781 workweeks by more than 5%, Drata Inc. is legally required to increase the gross $1.3 million settlement amount proportionally to maintain fair payout rates.
Payout distributions are subject to specific tax handling guidelines:
California Class Payouts: Calculated as 33.3% wages (reported on IRS Form W-2 with required payroll tax withholdings) and 66.7% non-wage damages and statutory penalties (reported on IRS Form 1099 with zero taxes withheld upfront).
Non-California Collective Payouts: Calculated as 50% wages (reported on Form W-2 with tax withholdings) and 50% non-wage damages (reported on Form 1099 with zero withholdings).
One of the most consumer-friendly aspects of this employment settlement is that no claim form is required for most eligible class members. Because the settlement administrator has access to Drata’s verified corporate employment records, class members will automatically receive their cash payment.
If you do not take any affirmative action, the settlement administrator will automatically issue a paper check and mail it to your last known residential address on record.
However, you can customize how you get paid:
Elect Electronic Payouts: You can choose to receive your settlement money via modern digital options—such as PayPal, Venmo, Zelle, or a direct bank deposit—by visiting the official administrator portal and submitting an electronic payment preference before the court’s final effective date.
Update Contact Details: If you moved or changed your mailing address since working for Drata Inc., you should contact the administrator immediately to prevent your paper check from going to an outdated physical location.
Dispute Work History: If you believe the settlement administrator’s record of your total work dates or overall compensation is inaccurate, you have the right to submit supporting documentation to challenge the calculation.
The $1,300,000 total gross settlement pool covers all litigation expenses, administrative fees, statutory state payments, and direct worker distributions.
| Settlement Line Item | Allocated Amount / Cap | Description |
| Class Member Payouts | Net Settlement Fund | Remainder distributed directly to eligible California and non-California SDRs |
| Attorneys’ Fees | Up to $433,333.33 | Covers legal costs and fees accumulated by class counsel |
| Named Plaintiff Service Awards | Up to $67,500 total | Up to $7,500 each for named class representatives who brought the suit forward |
| PAGA Penalty Allocation | $22,600 | $14,690 paid to the California Labor and Workforce Development Agency (LWDA) and $7,910 distributed directly to California PAGA class members |
| Administration Costs | To Be Determined | Covers notice mailings, database handling, tax filings, and check distribution handled by Apex Class Action LLC |
If you are an affected sales representative, you should track several critical milestones as the legal process moves through formal court approval:
Opt-Out Deadline (California Class): October 13, 2026
Electronic Payment Request Deadline: Final Effective Date (to be announced following court approval)
Final Approval Fairness Hearing: To Be Determined
The settlement administrator will distribute all cash checks and electronic funds approximately two months after the presiding court grants final approval to the agreement and any pending procedural appeals are completely resolved.
If you need to contact the settlement administrator directly regarding your contact information or payout choices, you can reach them using the following details:
Drata SDR Settlement
c/o Apex Class Action LLC
P.O. Box 54668, Irvine, CA 92619
Email: support@apexclassaction.com | Phone: 800-837-2979
Federal law under the Fair Labor Standards Act (FLSA) and strict state statutes like the California Labor Code were created to ensure employees receive fair pay for every hour they work. When tech startups or high-growth software corporations misclassify sales representatives as exempt executives or administrative personnel, everyday workers lose out on fundamental compensation—including premium overtime wages, guaranteed lunch breaks, and reimbursement for personal equipment or mobile phone usage.
Class action litigation allows employees to stand together against large corporate employers without having to pay out-of-pocket legal costs or face legal proceedings alone. These actions enforce wage transparency, hold corporate management accountable, and ensure everyday workers receive every dollar they earned through their hard labor.
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