A federal judge ruled against Swift Transportation Co. determining that five drivers classified as independent contractors should have been considered employees of the giant carrier.
The plaintiffs claimed in the case that due to the misclassification Swift failed to pay them all the wages required by federal and state wage and hour laws, including the Fair Labor Standards Act.
The drivers considered themselves to be employees because Swift controlled every aspect of their work schedules – from where and how the plaintiffs delivered freight to which routes the truckers had to use.
Swift also controlled the equipment the truckers used, including the maintenance and condition of the trucks, the lawsuit said.
Senior U.S. District Court Judge John W. Sedwick ruled on Jan. 5 that the contractor agreements the drivers signed were employment contracts, making them employees.
The plaintiffs’ attorney Dan Getman said the judge’s ruling over the misclassification question as “significant for the drivers.”
“It has taken us a while to get here, but fundamentally all of the pieces are falling into place,” Getman said. “Now we must determine how much more the company wants to fight or pay what they owe the drivers.”
Getman said he did not know if Swift will appeal the judge’s decision.
Swift did not respond to a Trucks.com request for comment about the case.
Upon hire, the plaintiffs were forced to sign employment and lease contracts before going to work for the Phoenix, Ariz.-based trucking giant, owned by Jerry Moyes. Swift employs more than 16,000 drivers and is the largest common carrier in the U.S.
“I think that Swift will be under significant pressure to settle these claims,” Getman told Trucks.com. “It’s time for them to face the music – the cost of continuing the case is likely to outweigh any financial benefit to Swift.”
The case has bounced around in the courts for more than nine years after it was originally filed in U.S. District Court in New York in 2009. However, Swift filed a petition to have the case transferred to the U.S. District Court in Arizona, near the trucking company’s headquarters in Phoenix. A judge granted the move.
The next phase in the collective and class action cases will be discovery “to determine how many thousands of drivers, dating back to 2006 or 2007, have allegedly have been misclassified by Swift.”
Since deregulation in the 1980s, Getman said there has been a trend by motor carriers to switch their fleets mainly over to independent contractors. This practice allowed trucking companies to push all financial risk onto the drivers by having them lease the equipment to reap record profits.
“This has become a common practice for trucking companies that misclassify its drivers to undercut their competition in the industry that properly classifies its drivers and pays them legitimately,” Getman said.
Misclassified drivers are starting to push back.
Recently, a major decision was reached in the Central Refrigerated Service of West Valley City, Utah, class action lawsuit, which is also owned by Moyes.
In late October, an arbitrator ruled that lease operators for Central Refrigerated are employees as a matter of law and not independent contractors.
“To put it simply, the drivers are covered by the federal minimum wage laws and should have been paid the minimum wage for every hour they worked,” Getman said of the ruling.
During discovery, Getman said the number of drivers that actually received a truck at the end of their lease contracts was “virtually nil.”
Since 2011, California truckers have filed more than 800 wage claims alleging they have been misclassified as independent contractors and as such were denied benefits owed to employees.
California port drayage companies have paid tens of millions of dollars to drivers who have won more than 300 cases. There are still around 199 driver wage claims pending, according to the Department of Industrial Relations.
A state legislator was successful in passing legislation in California – the Motor Carrier Amnesty Program. The amnesty deal, which ended on Dec. 31, would have allowed carriers to pay back wages to misclassified drivers and change their work status from independent contractors to employees. In return, the trucking companies would be relieved of any liability that may result in fines and other penalties.
Just four companies originally signed up for the program, but two companies dropped their applications ahead of the deadline.