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Monday, February 14, 2011

Arzate v. Bridge Terminal: Court Reverses Order Finding that Truck Drivers Are Independent Contractors

Arzate v. Bridge Terminal Transport, Inc. (1/31/11) --- Cal.App.4th ----, 2011 WL 285856, is a trucking industry independent contractor misclassification case.

The plaintiffs brought a wage and hour class action on behalf of truck drivers who were paid by defendant to transport cargo between ports and the facilities of defendant's customers. Plaintiffs alleged they were defendant's employees and asserted Labor Code wage claims and a claim for violation of the Unfair Competition Law. The trial court (LASC, Judge O'Donnell) granted the defendant's motion for summary judgment, holding that the plaintiffs were independent contractors, and the plaintiffs appealed.

The Court of Appeal reversed, holding that the defendant failed to establish, as a matter of law, that the drivers were independent contractors:

Here, the trial court erred in finding no triable issue of material fact. At its heart, this case involves competing, if not necessarily conflicting, evidence that must be weighed by a trier of fact. (Cf. S.G. Borello, supra, 48 Cal.3d at p. 351, 256 Cal.Rptr. 543, 769 P.2d 399 [factors "'are intertwined and their weight depends often on particular combinations'"].) Defendant repeatedly emphasizes that it did not “control[ ] the manner and means by which [plaintiff] hauled loads,” and if there were no evidence other than the evidence on “manner and means,” defendant might carry the day. (As we have seen, plaintiffs drove their own trucks and paid the related expenses, could have leased more than one truck to defendant and hired other drivers, could decline a dispatch, decided when and where to take meal and rest breaks, and so on.)

But there are multiple other factors that must be considered and that do not weigh in favor of independent contractor status. Defendant executed the CBA with plaintiffs' union, which represented the owner-operators of trucks in the role of “employees” of the company. Defendant issued W-2 forms to plaintiffs, withheld taxes, and offered health plan benefits that included paying 70 percent of the cost. Defendant also paid hourly rates for some parts of plaintiffs' work day, such as waiting time, drivers' meetings, and so on. Defendant could terminate the lease agreements on 24 hours' notice. (See S.G. Borello, supra, 48 Cal.3d at p. 350, 256 Cal.Rptr. 543, 769 P.2d 399 [“ ‘the right to discharge at will, without cause,’ “ is “ ‘[s]trong evidence in support of an employment relationship’ “].) And, while defendant asserts that its business is to “mak[e] arrangements between customers and the owner-operators of trucks for the movement of containers” and that plaintiffs “did not perform work that was part of [defendant's] regular business,” that claim is belied by defendant's own documentation, which states, correctly, that defendant is a “common carrier by motor vehicle, engaged in the business of transportation of property....” Thus, the work plaintiffs do “is a part of the regular business of the principal” (S.G. Borello, supra, 48 Cal.3d at p. 351, 256 Cal.Rptr. 543, 769 P.2d 399), a factor suggesting employee status.

In short, a reasonable trier of fact, considering the totality of the evidence, might reasonably conclude that plaintiffs were employees of defendant. We make no such finding, of course, concluding only that the trial court erred when it ruled, as a matter of law, that plaintiffs were independent contractors.

Slip op. at 5 (citations omitted).

The opinion is available here.

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