California Supreme Court makes independent contractor status tougher for motor carriers — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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California Supreme Court makes independent contractor status tougher for motor carriers

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in Employment Law,Human Resources

If your company is classified as a motor carrier, don’t expect the Federal Aviation Administration Authorization Act of 1994 (FAAAA) to protect you from misclassification claims. That’s the lesson learned by one motor carrier after a recent Cali­­for­­nia Supreme Court decision.

Recent case: Alfredo is the owner and manager of Pac Anchor Trans­­por­­ta­­tion, a trucking company in Long Beach. He recruits drivers to drive his trucks and had been classifying them as independent contractors. The drivers invest no capital, own no trucks and do not use their own tools or equipment. The ­­drivers, who have been employed for ex­­tended periods of time, can be ­discharged without cause. They do not have their own customers, nor any substantial control over operations. The drivers take all their instructions from Alfredo.

California sued Alfredo’s company for allegedly misclassifying the drivers as independent contractors.

Alfredo argued that the FAAAA preempted the action. The case worked its way up to the California Supreme Court, which said the FAAAA did not control the state’s efforts to enforce wage-and-hour laws. Alfredo’s company must comply. (Harris v. Pac Anchor Trans­­por­­tation, Inc. No. S194388, California Supreme Court, 2014)

Final note: The case was re­­manded to the lower court, which will decide if the drivers were independent contractors. Based on their duties and the control the carrier exercises over how they do their jobs, it’s quite possible the drivers will end up classified as employees rather than independent contractors.

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