Its not even New Years Eve, but we at Los Angeles Employment Attorney are throwing our hats into the air in celebration of yet another victory for employees who were forced to wear “independent contractor” labels but were really employees entitled to overtime, meal and rest breaks and employer contributions to their social security accounts. This time, the ax fell in the trucking industry. Ruiz vs. Affinity Logistics Corporation, 2014 DJDAR 76807.
This truck driving case has its origins back over 10 years ago, when the plaintiff, Fernando Ruiz was a driver for a company that delivered furniture for Sears. He was then an employee. After 2003, a company came in Ito take over the delivery contract and Ruiz was told the he needed to continue to do the same job, only be labeled an “independent contractor”. He was told to get a fictitious business name, obtain a license and open an business checking account. He was further told to sign contractor forms which had been filled in by the employer, Affinity Logistics Corporation.
His work relationship was anything but “independent”. He was required to follow language which told him he “must”, “will report”, required to”, 100 percent adherence, and “exactly as specified. The company controlled all routes, rates and schedules; Ruiz as to war a certain uniform, request time off, report to work at certain hours and advise if they were running late. They also had to lease their trucks from their employer. All costs of leasing and maintain their trucks was deducted from their payment. Ruiz’ claims are those typically covered by the California Labor Commission, who may be able to get back wages but not future lost wages and emotional distress as is recovered by private attorneys taking your claim to court.
The lower court had originally ruled that Ruiz was an independent contractor because he could hire helpers. The 9th Circuit (a federal court interpreting California wage and hour laws although federal employment laws are nearly identical) held that this was actually to help the employer. Further, these additional drivers and helpers actually were under the same control as Ruiz.
These drivers were facing the worse of both worlds: none of the freedom of being true business owners, yet without any protections of the California Labor Code. Further, companies such as Affinity violate the Unfair Business Practices Act by undercutting competitors who do follow the rules. Then again, maybe this practice is so widespread, no other companies take the high road, either! In any event, failure to properly classify if done willfully is now subject to a per-employee penalty of $25,000!
As a final take-away, always remember that in addition to the wage and hour violations, employees who complain in good faith about what they believe to be misclassification and are later found to have actually been employees, may be able to sue for wrongful termination and for whistle blowing rights under California Labor Code 1102.5 and 98.6. This allows for future lost wages, emotional distress and other losses.