Should You File a USKO Trucking Misclassification Lawsuit?

California lawmakers passed the controversial AB5 law last year with the intention of protecting people working in the gig economy by forcing companied to reclassify those workers as full-fledged employees entitled to key benefits like health insurance and overtime pay. Businesses and industries – including California truck drivers in the commercial trucking industry – have been challenging the law though, claiming their workers are independent contractors.

Drivers though, such as those working for USKO trucking, might be able to mount their own challenges in favor of full employment by filing lawsuits or participating in class action lawsuits.

Could Drivers Be Underpaid for USKO Trucking?

Advocates for the measure say AB5 limits a company’s ability to shortchange workers by reaping the benefits of their labor without having to compensate them the same way they do traditional employees. Opponents claim the added cost of fully employing the freelance workers would create a burden heavy enough to hurt many businesses and, in turn, the economy.

USKO trucking and all other trucking companies based in California depend on roughly 70,000 independent contractors to do the driving, Reuters reported last year. Many of those companies have argued since before AB5 was passed that if they had to reclassify all of those drivers as traditional employees, the added cost in overtime pay and benefits could put them out of business.

State legislators passed the bill anyway and the California Trucking Association responded by filing a lawsuit against the government. The association won an injunction temporarily stopping California from enforcing AB5 against “motor carriers” while the case is hashed out in court. The U.S. Court of Appeals for the Ninth Circuit is currently considering the arguments from both sides.

The trucking association is arguing that the Federal Aviation Administration Authorization Act of 1994, which prevents states from enforcing a law or regulation related to the price, route or service of “motor carriers,” supersedes AB5.

Some drivers have come out in support of the trucking association’s lawsuit against AB5. The Owner-Operator Independent Drivers Association, for example, filed a legal brief in support of the lawsuit and request for injunction to halt state enforcement. The owner-operators group argues that small trucking companies will suffer disproportionally alongside larger ones, like USKO trucking, and the regulations will put them out of business, harming the owner-operators.

Are You Misclassified as an Independent Contractor?

According to California AB5, a worker must be considered an employee, not an independent contractor, unless the business hiring the worker can demonstrate three things:

That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact.

That the worker performs work that is outside the usual course of the hiring entity’s business.

That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Does California Impose Penalties for Misclassifying Employees as Contractors?

Business that violate AB5 are subject to penalty if the violations can be proven. The law calls for fines of $5,000 to $25,000 per violation and companies found guilty “can be forced to cover payroll taxes, overtime pay and other costs retroactively if workers had been properly classified as employees,” according to a report by the Orange County Register.

Feds Weigh-In on Trucker Misclassification

Overdrive Magazine reports that the federal Department of Labor is considering rules that would clarify when a trucker should be considered an independent contractor and an employee. Until now, reports the magazine, federal labor laws have failed to provide clear standards for when a driver should be an employee and when a company can use them as independent contractors.

The agency has proposed a five-point test to determine whether a company can deem its workers “independent contractors.” According to Overdrive, the tests consists of the following factors:

• The ability of the employer to control their contractors, including scheduling, loads, and routes
• The worker’s ability to gain profit or suffer losses because of the work
• The skills required for the job
• How permanent the work is for the worker
• How integral the work is to the employer’s production

“I think that this is a step in the right direction for both motor carriers and independent contractor owner-operators,” one expert told Overdrive. “Because it’s providing clarity on how owner-operators can continue to do the work they want to do in the way they want to do it, while providing carriers a clearer legal standard for those contractor relationships.”

Overdrive says that the first two factors are the most important in determining whether trucker misclassification has occurred. Experts say the test will help companies properly classify their workers; however, more restrictive state laws, like California’s AB5 will preempt Department of Labor regulations, says Overdrive.

Any lawsuits or complaints against USKO Express trucking or other companies in California will need to take into account the state’s employment laws, including updates that may go into effect after this upcoming election.

What Is Proposition 22?

California voters passed Proposition 22 on Nov. 5 in order to exclude Uber and Lyft from AB5.

The Prop. 22 exclusions are in addition to some exclusions that were made at the end of August when the state passed AB2257, which allows certain exemptions for career choices that prefer to remain independent contractors. These include writers, photographers, interpreters, and musicians who do not have to be hired as employees in order to perform their duties. So far, the trucking industry is not covered by any propositions or legislation to be passed since AB5, which means AB5 still applies to USKO trucking.

Truck Drivers Covered By AB5

In People v. Cal Cartage Transportation Express, LLC, a trial court ruled that AB5 was preempted by federal law, but a California Court of Appeals reversed that decision on Nov. 19.

The lawsuit was filed in 2018 by the Los Angeles City Attorney’s office. NFI Industries and several of its subsidiaries, including Cal Cartage Transportation Express, CMI Transportation and K&R Transportation California were accused of misclassifying truck drivers as independent contractors when they should have been employees.

NFI tried to argue that the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempted state laws such as California’s AB5 that uses the ABC test to determine employment status.

The FAAAA says state laws that are preempted include any that are “related to a price, route, or service of any motor carrier… with respect to the transportation of property.”

The appeals court ruled against NFI, saying the FAAAA doesn’t preempt AB5 and that AB5 doesn’t prohibit using independent contractors and that it just defines worker classifications.

Can a Driver File a USKO Trucking Misclassification Lawsuit?

Class action lawsuits and other legal action have already been filed on behalf of truck drivers contesting their classification as independent contractors under AB5 in California.

In July, trucking giant J.B. Hunt agreed to settle a class action lawsuit filed against it by 312 independent contract drivers for $6.5 million. The drivers, who filed suit in U.S. Federal District Court for the Central District of California in 2019, are set to receive about $20,000 each to give up the legal fight, the industry website Freightwaves reported.

“The original suit charged that [the independent contractor drivers] performed the same tasks as company drivers, but that total compensation at times failed to meet minimum wage requirements, that rest and meal breaks were not provided, and that labor records were not kept properly,” Freightwaves reported.

Top Class Actions can help drivers with USKO trucking or other trucking companies who think they have been misclassified by the company and denied the full compensation and benefits they are due under the law by putting them in touch with experienced, qualified lawyers who handling such things. California’s AB5 can be complicated to navigate and courts are already sorting through many cases brought against businesses suspected of violating it. Having an experienced lawyer to answer questions and offer guidance can help to simplify matters.

Join a Free Trucker Overtime Class Action Lawsuit Investigation

You may qualify for legal help through this investigation under the following circumstances:

• You worked as a independent contractor driver in California;
• You live in California OR you drive through California;
• You believe you were underpaid; and/or
• The trucking company failed to honor a contract with you.

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