Fed. Court Upholds $958K Payment Over XPO Logistics Employee Misclassification

By Heba Elsherif | September 11, 2017

Category: Labor & Employment

XPO truck drivers employee misclassification According to a recent report, XPO Cartage, a U.S. corporation and one of the largest providers of transportation and logistics, has been ordered to pay five of its drivers $958,000 over allegations of XPO Logistics employee misclassification.

A federal court has recently upheld the California Labor Commissioner’s total award based on XPO Cartage’s alleged misclassification of its employees as independent contractors.

XPO Cartage was formerly known as Pacer Cartage, and is now a subsidiary of XPO Logistics. The company is appealing the commissioner’s ruling, and the appeal has since landed in federal court.

According to an article by Commercial Carrier Journal, which describes the alleged XPO Logistics employee misclassification, the U.S. District Judge presiding over the case has required XPO Logistics’ subsidiary to reimburse the drivers that it had allegedly mistakenly misclassified as independent contractors.

The company still disputes the allegations, arguing that XPO Logistics employee misclassification was not in fact a misclassification, but rather that their drivers prefer to work as independent contractors. They stated that they will continue to advocate for their drivers’ right to do so.

The judge presiding over the case concluded that the 1994 Federal Aviation Administration Authorization Act of 1994 does not preempt the five cases. According to the Commercial Carrier Journal article, federal courts have agreed since 2013 that the commissioner has the authority to hear these wage claims from truckers, and that they are not precluded by federal law.

The judge also did not agree with XPO’s argument that the truckers should be compelled to resolve their claims through private arbitration.

Additionally, the article iterates that the trial ended with the judge upholding the commissioner’s awards of $95,320 to $286,928 to the truckers for the company’s unlawful deductions and expenses. The commission had also awarded the four truckers for rest and meal breaks, interest, and liquidated damages.

The awarding from the XPO Logistics employee misclassification will also cover the truckers for their “nonproductive time.” This awarding follows a law passed in 2016 which affects piece-rate workers across all lines of work. It requires businesses to compensate workers paid by the piece for certain non-productive time spent on the job. In the current case, the truckers were able to secure compensation for tasks such as scanning documents and inspecting their truck.

The company is also appealing an earlier administrative decision, in which the agency awarded four truckers that were misclassified as independent contractors $855,286. Following this commission’s order, the ruling is now on appeal.

XPO Logistics has also been facing other administrative actions and lawsuits across the country over allegations of XPO Logistics employee misclassification. Even though they may be classified as contractors, truck drivers for this company may be entitled to certain benefits and protections that the law provides for employees. A consultation with a knowledgeable employee rights attorney can give you a good idea of your rights and options.