This is a very big deal, not just in the trucking industry, but also in terms of the “Sharing Economy” (Lyft, Uber, etc):
The U.S. Supreme Court rejected an appeal by the California Trucking Association on Monday in a case that could classify tens of thousands of California truck drivers as employees of freight-hauling companies, with the right to minimum wages, overtime pay and reimbursement for business expenses.
The drivers sign up with freight haulers under standard contracts that describe them as “owner-operators” of their trucks. The Trucking Association and its members contend those drivers are independent contractors, paid at a specific rate and responsible for their own expenses.
More than 400 of the drivers have challenged their classification before the state Department of Industrial Relations, which has found nearly all of them to be employees rather than contractors. Other drivers have joined in class-action suits against trucking companies, seeking employee status.
California labor officials have relied on a 1989 state Supreme Court ruling that classified workers as employees if the company had substantial control over the work they did, and that put the burden of proof on the company to show contractor status.
Last April the court, in a case involving package delivery drivers, said a company must prove workers are running their own independent businesses to classify them as contractors. Labor unions are backing legislation that would affirm that ruling as state law.
In federal court, the Trucking Association argued that a 1994 federal deregulation law prohibited California from determining the drivers’ employment status. That law bars states from enforcing any statutes or regulations “related to a price, route or service of any motor carrier … with respect to transportation of property.”
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But the Ninth U.S. Circuit Court of Appeals upheld the state regulation in September and said the classification of drivers as employees or contractors did not regulate a company’s prices, routes or services.
The use of independent contractor status as a way of evading one’s responsibility as an employers is wrong, and it should be ended.