The Supreme Court Will Not Review “The Truck Drivers Are Employees” Decision

Randi Klein Hyatt
Randi Klein Hyatt

Time and time again, employers get dinged for improperly classifying employees as independent contractors.  Whether it is unpaid taxes or employees seeking unpaid wages, these cases are increasing.  Ruiz v. Affinity Logistics Corp., 754 F.3d 1093 (9th Cir. 2014) is no different.  Here, the Supreme Court decided it would not reconsider the employer’s argument that its furniture delivery drivers were independent contractors, and not employees, and therefore not entitled to sick leave and other benefits.  Affinity Logistics Corp. v. Ruiz, No. 14-451 (U.S. Dec. 15, 2014).

The petition dates back to a class action filed in 2005 on behalf of several hundred drivers alleging Affinity Logistics Corporation (“Affinity”) misclassified its delivery drivers as independent contractors by requiring them to sign “independent truckman’s agreements” to avoid paying overtime and other benefits.  The trial court ruled that the drivers who signed the agreements were properly classified as independent contractors.  The Ninth Circuit reversed, holding that under a multi-factor “right to control” test, the drivers were Affinity employees because Affinity maintained the ability to control details of the drivers’ work, including pay rates, schedules, routes, work days, days off,  equipment — including trucks, tools and mobile phones, uniforms and physical appearance.  According the Ninth Circuit, the personal separate “businesses were in name only.”  In short, the drivers’ only business was with Affinity because they could not use the trucks that the company “leased” them for any purpose other than deliveries for Affinity.  The Ninth Circuit concluded that the drivers performed the home delivery services that were “the core of Affinity’s regular business” and that “[w]ithout drivers, Affinity could not be in the home delivery business.”

In its petition, Affinity argued that the Ninth Circuit overturned the district court’s ruling by ignoring the district court’s detailed and reasoned fact-finding, including specifically identifying 17 issues relevant to the “right to control” test on which the Ninth Circuit made different factual findings, without any reasoning that the district court’s findings were “clearly erroneous.”   The Supreme Court did not agree with Affinity’s predicted ramifications of the Ninth Circuit’s ruling, as it denied Affinity’s petition without comment.  This should serve as a reminder to businesses to properly classify employees as independent contractors.  After spending a decade defending a class action lawsuit and appealing to the Supreme Court, Affinity will now likely have to settle to avoid a sizable judgment, and an even greater award of attorneys’ fees.

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