According to recent news feature from HR.BLR.com, a California employer operates a shipping, distribution, and warehousing business at ports in Southern California, including Los Angeles and Long Beach. The company accepts the shipments at the docks, stores the merchandise, and then has its drivers deliver the goods throughout the state of California.
The California employer hires a number of drivers who they classify as independent contractors. Many of these so-called independent contractors filed claims with the Labor commissioner for the state of California pertaining to wage disputes. In response to the claims, employer filed a motion with the court to make the drivers handles their wage disputes in arbitration rather than with the court.
The reason they say the court should do this is because the independent contractor agreements the drivers signed have an arbitration clause. An arbitration clause requires the claim to be submitted to arbitration before a so-called neutral arbiter rather than filing a traditional claim with the labor commissioner. There are various reasons employers want arbitration clauses, not the least of which is that arbitrators tend to side with the large corporations more often than not, because it is often good for business, especially if they want repeat business.
While the employment commissioner and the truck drivers opposed this, they did not file any opposition. The trial court did side with them and dismissed employer’s motion. However, the employer appealed on grounds that federal law trumps state law, giving the interstate transportation wage disputes to the FAA to handle, and, under the federal law, the arbitration agreements are binding.
However, as the article notes, the situation might have been different had the plaintiff’s lawyers filed a misclassification of employment claim. The reason this might have worked is, by showing these workers were not really independent contractors but rather employees who were misclassified, the federal law would not apply nor would the contract provision requiring binding arbitration.
When determining if a worker is an employee or an independent contractor, California courts will consider who controls the employee’s work and to what extent it is controlled. For example, when you hire a painter to paint your kitchen, you will tell him or her what color to use, and you might even buy the paint, but you will not generally say what type of roller or brush to use, you will not say when the contractor can take lunch, and you will not watch and tell them exactly to how to paint the kitchen.
Another factor the court uses to determine if a worker is an independent contractor or an employee is whose equipment the worker is using. A contractor will have to provide his or her painting equipment, ladders, and other such equipment. An employee would be provided with everything he or she needs to work, because an employer can’t normally make an employee buy all of his her own tools.
The reason this is relevant is because an employee is entitled to benefits in many situations and overtime when working over 40 hours in a week. A contractor is not entitled to any of these things, and employers have been known to misclassify their employees to avoid paying more money for their workforce.
Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 714-937-2020.
Arbitration: California truck drivers compelled to arbitrate wage claims, December 29, 2015, HR.BLOR.com
More Blog Entries:
Allen v. Chicago – Overtime Pay for Smartphone Use After-Hours, Aug. 10, 2015, Orange County Employment Attorney Blog