By Clarissa Kell-Holland, staff writer
The ads make all sorts of promises: Make more money as an independent contractor. No credit check for a $100,000 truck. A fresh start. Too many company drivers who are eager to live a better life are lured into lease-purchase scenarios and fail to question who is in the driver’s seat until it’s too late.
Motor carriers of all sizes have decided there’s money to be made by switching their fleets mainly to independent contractors, pushing all of the financial risk off on the drivers, while reaping record profits. Of the thousands of drivers who sign lease-purchase agreements each year, few are able to complete the terms of their contracts, often through no fault of their own.
Who’s really in the driver’s seat?
According to Merriam-Webster’s Dictionary, the definition of the word independent is “not subject to control by others.”
However, truck drivers who signed leases with Central Leasing to work for Central Refrigerated Service of West Valley City, UT, claim the company controls every aspect of their jobs. The drivers say they are misclassified. Their lawsuit claims they are really employee drivers, not independent contractors as the company outlines in their contracts.
Dan Getman of the law firm Getman and Sweeney PLLC of New Paltz, NY, filed a collective and class action lawsuit in June 2012 against Central Leasing and Central Refrigerated. The suit is on behalf of hundreds of drivers who signed the lease agreements.
Getman said there have been two significant rulings from Judge Virginia A. Phillips in the U.S. District Court for the Central District of California.
Getman said that while the drivers are classified as owner-operators in the contracts, the judge found them to actually be employees.
“One of the significant decisions is that first the judge … found them to be employees. The company exerted a significant amount of control over the drivers and therefore, by law, they are really employees,” Getman said in February.
Central Refrigerated, which has more than 2,000 power units and drivers, is owned by Jerry Moyes, who also owns Swift Transportation.
Getman said his firm also has a lawsuit pending against Swift over its lease and lease-purchase agreements and misclassification of drivers as independent contractors instead of employees.
He said Judge Phillips reached the employee ruling as a precursor to deciding whether the Federal Arbitration Act applies – which she ruled that it does. Now the case can move forward in arbitration.
“This was a significant ruling because that’s the linchpin of our argument: that the companies have claimed the drivers are independent contractors, but then exert so much control over limiting their profitability, limiting how they drive, etc.,” Getman said.
“Our claims are that they have so much control that drivers are employees, so therefore you owe them money and should pay them minimum wage.”
In the cases he has filed against Central Refrigerated, as well as Swift, he said he has yet to speak to a driver who purchased the truck at the end of the lease-purchase agreement, but he said he has heard there are a few of them out there.
Getman said the basis of the forced labor claim is the way the contract is worded. If the driver is fired or quits, the company considers the driver in “default” of the agreement. Drivers stay even though they aren’t able to pick their routes or their loads and are unable to take their truck and drive for another motor carrier for fear of defaulting on their contracts. That usually means financial ruin because they are still on the hook for the remaining truck payments.
“So the driver feels they can’t leave even though they are watching all of their savings get eaten up because they are tied to their trucks and are being bled dry,” he said. LL