Judge rules against logistics company motion to dismiss misclassification lawsuit

By Tyson Fisher, Land Line staff writer | 9/30/2016

In an attempt by National Freight Inc. to dismiss a class action lawsuit alleging misclassification by drivers, a federal judge in New Jersey denied the logistics company’s motion and gave the green light for the lawsuit to proceed.

Last November, eight NFI delivery drivers filed a lawsuit accusing the company of misclassifying drivers as independent contractors despite NFI having complete control of their operations, according to court documents. Plaintiffs cited a Massachusetts wage law that clearly defines the difference between an independent contractor and employee. NFI argued that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) supersedes Massachusetts state law, nullifying the lawsuit.

From 2009 to 2014, drivers in the lawsuit made deliveries to Trader Joe’s for NFI throughout Massachusetts. Drivers would pick up loads at NFI’s warehouse in Nazareth, Pa., and deliver to Massachusetts, Rhode Island, Connecticut, New York, New Jersey and Virginia. Although the drivers were hired as independent contractors, they were allegedly subjected to the following:

  • Must lease their trucks to NFI;
  • Only deliver for NFI, i.e. could not pick up loads for another company;
  • Were paid for fewer miles than driven each day;
  • Work full-time for six days a week;
  • Only drive NFI’s established routes, not allowed to deviate;
  • Pick up loads outside set routes without pay;
  • Must comply with NFI’s written and unwritten policies;
  • Supervision by NFI managers;
  • Required to use NFI’s “scanning/radio devices”; and
  • Insurance requirements.

Massachusetts law has a three-prong test to determine who is considered an independent contractor: individual is free from control and direction; service is performed outside the usual course of employer’s business; and individual is customarily engaged in an independently established trade.

FAAAA prohibits states from enacting laws that could affect a motor carrier’s price, route or service. NFI argues that this federal provision applies to reclassification of independent contractors since doing so will add to the motor carrier’s price structure by passing down the costs accrued from providing insurance, fuel, etc.

Although precedent exists supporting NFI’s claim, the judge pointed out the most recent ruling in the federal court system only preempts one of three prongs – performing outside usual course of business – in the Massachusetts law. Therefore, NFI still has to address the issues of control and drivers engaging in an independently established trade. Consequently, the motion to dismiss based on FAAAA law was denied.

In the case of controlling the drivers’ operations, the above allegations by the plaintiffs suggest they were at the mercy of NFI. In regards to engaging in an independently established trade, although trucking could be considered such, the plaintiffs point out that the clause prohibiting them from driving for another company disqualifies them from that designation.

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