Delivery Drivers are Employees, Not Independent Contractors, Ninth Circuit Rules

by BakerHostetler
Contact

Sometimes a title tells you all you need to know. If you listen to the 1969 Pink Floyd track, “Several Species of Small Furry Animals Gathered Together in a Cave and Grooving with a Pict,” you pretty much know what you are going to get.  Sure enough, the track consists of four-plus minutes of noises resembling rodents and birds, with echoes (they’re in a cave, remember?) and other effects.

Sometimes a title tells you nothing. If you look up the lyrics to “Careful with that Axe, Eugene,” which appears on the same album, [1] you’ll get nothing. No matter how much you want to know who Eugene is and why he should be wary of that axe, no words can be found.  It’s an instrumental.

The Ninth Circuit’s view of independent contractor relationships is all axe and no furry animals. Ignore the titles and be careful. You might get hurt.

In Ruiz v. Affinity Logistics Corp., Case No. 12-56589 (9th Cir. June 16, 2014), the plaintiffs performed delivery services in California for the defendant under contracts that provided both that the relationship was governed by Georgia law and that the drivers were independent contractors. They asserted in a putative class action that they should have been paid sick leave, as well as other employment benefits under California law, but had been misclassified. The district court originally applied Georgia law and, following a bench trial, entered judgment for the defendant on the grounds that the plaintiffs were indeed independent contractors. The plaintiffs appealed.

In the first appeal, in 2012, the Court of Appeals disregarded the parties’ contract provision that said Georgia law would apply to any disputes and applied California law instead, finding that Georgia law was too favorable to the company’s position. It then remanded the case for application of California law. Ruiz v. Affinity Logistics Corp., 667 F.3d 1318 (9th Cir. 2012).

On remand, and largely on the same record, the district court again entered judgment for the employer, but this time under California law. The plaintiffs again appealed.

In a decision issued June 16, 2014, the Ninth Circuit ruled that despite the contract terms to the contrary, delivery drivers for Affinity Logistics were employees under California law, not independent contractors. The Court of Appeals disregarded the fact that the drivers all had independent contractor agreements, formed their own corporate entities, paid for their own trucks, and could hire their own helpers.

Instead, based on the same record reviewed by the district court, it held that Affinity controlled enough aspects of the drivers’ workday and work methods that they were employees under California law, regardless of the titles the parties used to describe the relationship. The Court of Appeals cited a long list of reasons, including the company’s tight control over routes and schedules, a detailed procedures manual that demanded “100 percent adherence,” employment-like policies relating to vacation time, use of the drivers’ leased trucks leased by other drivers without compensation, mandatory daily meetings, company uniforms, daily inspections, and real-time monitoring of routes.

The case provides a reminder both that mere language reciting that the relationship is one of an independent contractor may not be enough if other factors reflect an employment relationship and that courts will not hesitate, under the right facts, to axe an independent contractor relationship and find that workers should have deemed employees. The business model of classifying delivery drivers as independent contractors has been under particularly harsh scrutiny lately, with various class actions being filed and settlements making news. A New York statute also took effect this spring that makes it harder to classify commercial drivers as independent contractors.

On the flip side, the Ninth Circuit has recognized that insurance agents are independent contractors. Barnhart v. New York Life Ins. Co., 141 F.3d 1310 (9th Cir. 1998).

More information about the Ninth Circuit’s Ruiz decision can be found here on our sister blog, Employment Law Spotlight.

And by the way, a Pict is a Scotsman. Unless you are in California. There, it’s just another word for employee.

The Bottom Line: Some courts, and the Ninth Circuit in particular, will look well past the terms of a contract to determine whether an independent contractor relationship truly exists.


[1] Ummagumma

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:

BakerHostetler
Contact
more
less

BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.