The Trucking Industry is on the Road to Clarity for Driver Classification Issues

Katherine M. Flett

By Katherine M. Flett



trucking

The trucking industry has commonly used the owner-operator model for interstate commerce.  Whether individual state labor laws, which typically require labor protections such as minimum wage, sick leave, and unemployment and workers’ compensation benefits, apply to truck drivers generally depends on their status as employees or independent contractors.  California attempted to provide a mandatory test for determining whether a driver is an employee or independent contract in its Assembly-Bill 5 (“AB-5”).

For three decades prior to the enactment of AB-5, California courts relied on a test based on the decision in S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations that considered the following factors when determining whether a worker was an employee or independent contractor: (a) the right to control work; (b) whether the worker is engaged in a distinct occupation or business; (c) the amount of supervision required; (d) the skill required; (e) whether the worker supplies the tools required; (f) the length of time for which services are to be performed; (g) the method of payment; (h) whether the work is part of the regular business of the principal; and (i) whether the parties believe they are creating an employer-employee relationship.[1] In April of 2018, the California Supreme Court replaced the Borello classification test with the “ABC test,” by its decision in Dynamex Operations West v. Superior Court.[2]  The AB-5 test essentially codified the “ABC test” established by Dynamex.

However, on December 31, 2019, the day before AB-5 was set to take effect, the Southern District of California granted a temporary restraining order in California Trucking Association, et al v. Attorney General Xavier Becerra, et al., temporarily enjoining the State of California from enforcing AB-5 as to any motor carrier operating in California. [3] Continue reading »

Freight Brokers Granted Some Limitations to Plaintiffs’ Vicarious Liability and Negligence Theories

Katherine M. Flett

By Katherine M. Flett



Since the Sperl v. C.H. Robinson Worldwide, Inc. decision in 2011, freight brokers have been battling vicarious liability claims for the actions of motor carriers and their truck drivers.

In Sperl, truck driver DeAn Henry was involved in a multi-vehicle collision, resulting in several deaths. Henry owned the tractor she was driving and leased it to Dragonfly, a motor carrier. When the collision occurred, she was delivering a load for CHR, a freight broker. Dragonfly and CHR entered into a contract carrier agreement, which described the relationship between the parties as follows:

“The parties understand and agree that the relationship of [Dragonfly] to [CHR] hereunder is solely that of an independent contract and that [Dragonfly] shall and does, employ, retain or lease on its own behalf all persons operating motor vehicles transporting commodities under this Contract.”

Nonetheless, Dragonfly gave Henry permission to use its carrier authority to book and deliver loads on her own. If Henry booked a load, she would be permitted to keep all the profit. If Dragonfly dispatched Henry, Dragonfly would be entitled to five percent. Suit was filed against CHR, among other defendants, for wrongful deaths and personal injuries.

trucking

trucking on scenic highway, sunset and clouds

At trial, Henry testified that Dragonfly did not dispatch her for the load she was transporting for CHR when the collision occurred, but instead Henry called CHR and requested the load herself.  Evidence revealed that CHR required Henry to have a refrigerated trailer of a specified length and CHR dictated special instructions concerning the load, including requirements that she pick up the load at a specified time, make daily check calls, and stay in constant communication with the CHR dispatchers. If Henry did not comply with the special instructions, she was subject to CHR’s system of fines.

At the close of trial, CHR moved for a directed verdict as to the agency issue, which was denied. The jury concluded that CHR was vicariously liable based on agency and entered judgment in favor of the plaintiffs in the amount of $23.8 million. The trial court denied CHR’s motion for a judgment notwithstanding the verdict and motion for new trial. Continue reading »