Judge rules Swift misclassified owner-operators as independent contractors

Original Post Source

Dive Brief:

  • A federal judge ruled last week Arizona-based Swift Transportation misclassified owner-operators as independent contractors rather than employees, the Wall Street Journal reported Thursday.
  • In his decision, the federal judge argued Swift had “full control of the terms of the relationship” as owner-operators who leased trucks from the Swift subsidiary practically had to drive for the company. The Wall Street Journal adds Swift classified 4,391 drivers as owner-operators as of last quarter. 
  • While the case currently affects only five drivers who are now owed back wages, the ruling opens the door for past drivers who were similarly under-compensated. Swift has filed a notice of appeal.

Dive Insight:

The present worker victory against Swift extends the labor battle over misclassifications to trucking companies, which have long employed workers on a contract basis. While such battles in the trucking industry are commonplace due to owner-operators’ unique asset position, and subsequent dependency on certain companies or jobs, the popularization of the “gig economy” has placed increased pressure on the Department of Labor to better clarify and review the conditions upon which a worker can be labeled an independent contractor.

At issue is whether the workers in question are in fact independent contractors, meaning that they are not solely dependent on their employers for income. Cases involving Amazon, Uber, and FedEx have garnered significant national attention, perhaps empowering others recognizing significant similarities in conditions.

As workers fight back against the independent contractor loophole on employment standards, a case can be made that it is increasingly problematic for employers as well, with big back payouts becoming increasingly common.

The Swift case must still undergo the appeal process, but The Wall Street Journal adds the transportation company recently paid $22 million for a class action case against a subsidiary. But since many independent contractor cases are settled on a case-by-case basis, class action cases are harder to push through. Just like the classification of drivers, though, the legal precedents show only a wide gray zone.

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