Independent Contractor Misclassification

Independent Contractor Misclassification

Logistics and Transportation Misclassification

Over the past few years, the transportation and logistics industries have faced numerous lawsuits, both individual and class actions, relating to Independent Contractor Misclassification. Logistics employers for years attempted to classify their drivers as independent contractors, rather than employees. This was most noteworthy with FedEx drivers. For many years, FedEx has faced lawsuits from their drivers, with many of them resolving in the favor of the employees who were misclassified as independent contractors. Recently, a California federal judge approved a $227 million settlement over these very claims – independent contractor drivers for FedEx were always employees.

Transportation and Logistics Contractors – Likely Employees!

With transportation, the focus has shifted away from taxi cab drivers and has moved to  popular ride-sharing apps, including Uber and Lyft. Uber is currently in litigation in California relating to the Independent Contractor Misclassification of its drivers. The Uber drivers recently defeated a motion for summary judgment by Uber, leading this matter to a trial date in June 2016. On January 27, 2016, the Court denied Uber’s emergency stay request, pushing this matter closer to trial. Ultimately, this matter will likely lead to a settlement. Similarly, this week Lyft agreed to pay $12 million to a proposed class of Independent Contractor Misclassification drivers who also demanded employee benefits.

What is interesting about most of these cases is that the employers deny that the drivers were employees and often continue to misclassify the drivers. Rather than properly classifying the drivers as employees, they instead mandate that the drivers execute agreements forcing these matters into individual arbitrations, waiving the right to proceed as a class action, and related clauses to help avoid representative litigation in the future. Skilling O’Leary, PC has defeated such arbitration clauses, however, this is becoming more difficult. As a result, it seems like the same employment practices will continue. Thus, you or a loved one may be entitled to owed wages, including overtime premiums, expense reimbursement, penalties, and related damages.

Misclassification Hurts Workers

When a worker is misclassified as an independent contractor, he or she is not protected by employment laws. Federal and state employment laws provide minimum wage and overtime protection for workers. Additionally, contractors have no right to:

  • family medical leave and/or sick leave;
  • unemployment insurance;
  • no legal right to organize or join a union; and
  • no protection against employer retaliation.

Independent Contractor Misclassification removes the many protections provided under Federal and State law to workers.  Additionally, Independent Contractor Misclassification results in a significant loss of payroll tax revenue to the Federal and state governments. Skilling O’Leary, PC has assisted drivers in recovering damages from these businesses. If you or a loved one has been improperly classified as an independent contractor, contact us for a consultation.

by Tim O'Leary
January 29, 2016

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