Arizona District Court Rejects Joint Employer Arguments in Independent Contractor Case Alleging Misclassification of Truck Drivers

by BakerHostetler
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A month ago we discussed the Ninth Circuit’s decision in Ruiz v. Affinity Logistics Corp., Case No. 12-56589 (9th Cir. June 16, 2014), in which the employer treated its delivery drivers as employees in everything but name, resulting in the unsurprising finding that they were employees and not independent contractors. An Arizona district court has now granted summary judgment in favor of at least one of the putative employers on similar claims involving very different evidence.

In Montoya v. 3DP, Inc. Case No. CV-13-8068-PCT-SMM (D. Ariz. July 9, 2014), the plaintiff was a delivery driver for a contractor of the Home Depot home improvement chain. He sought to bring a collective action under the FLSA and a state law class action against both the contractor and Home Depot, contending that he and others like him were misclassified as independent contractors. He argued that Home Depot was a joint employer of the contractor and thus liable for any misclassification. In support of this argument, he pointed to facts such as instruction and training he had received in a Home Depot parking lot, contact with a Home Depot employee responsible for coordinating deliveries, and the presence of Home Depot logos both on the truck he leased and on his uniform.

The court ultimately concluded that these facts were not sufficient to find that Home Depot was a joint employer. Among other factors, it found that Home Depot did not interview or hire drivers, and that even if it no longer wanted a driver’s services, that individual could still make deliveries for the contractor on behalf of other companies. It rejected the notion that Home Depot’s coordination of schedules amounted to control over hours of work. Similarly, it found that the contracts between Home Depot and the contractor did not amount to control over wages. Home Depot did not keep a personnel file (or its equivalent) for the drivers.

The court distinguished Ruiz as not addressing the joint employment issue, and granted summary judgment for Home Depot. The court’s opinion does not address the contractor’s own liability.

The plaintiff in Montoya probably saw naming Home Depot as a defendant as a means of broadening the case from a local-based contractor to a nationwide chain with many times more potential class members. In doing so, however, he put himself in the position of having to challenge both the independent contractor status and to establish the requisite control by the customer. Even had summary judgment not been granted, it is easy to see the employer prevailing on class certification on the grounds that each contractor managed its workforces differently and the relationship between Home Depot and the various delivery contractors varies by location.

The bottom line: Joint employer arguments can be hard to make in cases challenging independent contractor status and present serious strategic issues for the plaintiff.

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