Trucking Company Settles Class Action Over Misclassification Ending Nine Year Litigation

Following a ruling made by a federal judge last month,Trucking company, Hub Group Inc., was ordered to pay $7.25 million to a class of California drivers who accused the company of misclassifying them as independent contractors.. In her decision, Judge Mays elaborated that “the risks of continued litigation are substantial due to the uncertainty and changing legal landscape affecting several critical federal preemption issues.” 

Her comment refers to the ever-evolving nature of classifying independent contractors and determining which federal rules apply to their work. As independent contract work has flourished as a mainstream employment option, courts nationwide have struggled to formulate specific litigation and legislation that defines the legal line from its W-2 employee alternative. 

The recent decision in the Hub Group Inc. case concludes a prolonged litigation of over nine years. The multi-million dollar settlement was ultimately  agreed to “only after the trucking company stopped hiring independent contractors as drivers in California, a change that occurred independently of the settlement, but that nevertheless shows the suit ‘provided an additional benefit to class members,’ Judge Mays said.”

Who, What, Where? 

Drivers misclassified as independent contractors are at risk of being denied standard employment benefits including a minimum wage, overtime compensation, and paid time off. Contractors are also not covered by protective federal organizations such as the Occupational Safety and Health Administration (OSHA) and do not receive workers’ compensation for injuries suffered on the job. 

The California Supreme Court produced a 2018 decision that introduced an ABC test for evaluating a worker’s status as an independent contractor or employee. Using the test, a worker is considered an employee unless a company can demonstrate that the worker is “free from its control, performs work outside its line of business and operates as an independent firm.”

The litmus test for classifying employment does not, however, clarify what federal laws preempt state laws. The Federal Aviation Administration Authorization Act (F4A), for instance, may conflict with prong B of the test. The law “prohibits a State…from enforcing any law related to price, route, or service…when such a carrier is transporting property by aircraft or by motor vehicle.” Judicial commentary has not been consistent on whether the federal law undermines California’s classification test. 

California has been at the forefront of addressing disparities between protections for independent contractors, particularly on issues pertaining to safety. Despite potential contradictions with the intricacies of federal law, California codified its ABC test in Assembly Bill 5. The law instills that all workers are employees unless proven otherwise, securing more workers in their wages and positions. 

Contact the Working Solutions Law Firm Today!

Do you suspect that you’ve been misclassified in your job? If so, contact us today at (646) 430-7930 to receive a free case evaluation and connect with experienced legal counsel. The employment lawyers of the Working Solutions Law Firm are located in New York City and Livingston, New Jersey. 

Our employment lawyers specialize in many areas of the law, including unpaid wages and overtime, retaliation, and wrongful termination. Whatever your employment issue is, please reach out for a consultation today.