A New Jersey appellate court has ruled in favor of a trucker who is seeking class-action status for a lawsuit over lost overtime wages. The appellate court’s decision overturns a lower court’s ruling that dismissed the driver’s case regarding employee-versus-independent-contractor status.
On Oct. 29, the Superior Court of New Jersey Appellate Division agreed with plaintiff Raymond Veras’ appeal of the Law Division’s ruling from nearly two years ago dismissing his class- action complaint. Veras, a driver for Interglobo, was invoking the New Jersey wage and hour law and the New Jersey wage payment law to collect unpaid overtime.
In the original complaint, Veras claimed that Interglobo hired him and other members of the putative class as truck drivers and/or delivery drivers. Veras stated that he was assigned to perform nonexempt tasks as part of his employment. Claims of employee status were backed up by pointing out the following:
- Interglobo controlled the manner and means in which Veras performed his duties.
- Veras received directions from Interglobo and its employees.
- Veras was required to wear Interglobo’s uniforms.
- Veras handled paperwork and invoices with Interglobo customers.
- Interglobo had the right to discipline and terminate Veras from employment.
Additionally, Veras claims that Interglobo withdrew funds from his pay to reimburse for truck insurance and fuel. The complaint also states that Veras “routinely worked far in excess of 40 hour per week.” Citing the state’s wage and hour law and the state’s wage payment law, Veras is seeking overtime pay that he never received as a result of being misclassified as an independent contractor.”
Interglobo responded with a motion to dismiss by pointing to a June 2014 signed agreement between Interglobo and Veras’ company, J&K Trucking Solution. The lower court judge agreed with Interglobo, finding that the matter was a contract dispute and that Veras has no individual right to sue.
Within the June 2014 agreement, both Veras and Interglobo “acknowledge and agree that (Veras) is an independent contractor and that he shall have the sole and complete discretion to hire, regulate, discipline or discharge all personnel engaged by the contractor to carry out the contractor's obligations hereunder and to determine the manner and method in which such obligations shall be performed.”
The agreement also stated that Veras must pay all expenses incurred in the operation of “his business” including rent, wages, overhead, maintenance, vehicle repair and insurance, according to court documents. Veras was to supply at least one truck for deliveries for Interglobo, including a licensed driver.
Citing a Supreme Court decision, Veras argued in his appeal that despite the agreement, he was an Interglobo employee as defined in New Jersey wage laws. The appellate court agreed.
“The dismissal of plaintiff's complaint at this stage, based solely on defendants' contract with plaintiff's company, was premature because the issue's resolution required additional evidence relating to whether, despite his company's agreement, plaintiff was actually employed by defendants for (wage and hour law) and (wage payment law) purposes,” the court opined.
To determine employment status, New Jersey courts employ what it calls the “ABC test,” which refers to the three subparagraphs of a statute that defines “employment.” Employment is assumed unless the following are met:
- A. An individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact.
- B. Service is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed.
- C. An individual is customarily engaged in an independently established trade, occupation, profession or business.
An employer holds the burden to prove each of the three prongs of the ABC test. If each element is not met, the claimant is considered an employee rather than an independent contractor. A signed agreement does not determine ABC test results. Rather, all facts surrounding the relationship must be considered.
Consequently, the appellate court reversed the lower court’s decision dismissing Veras’ case and remanded the matter for further proceedings consistent with its opinion.
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