"Update: Swift Transportation contacted Supply Chain Dive to clarify the legal implications of the outcome of the case. The Dive Brief section and language in the last paragraph has been updated to reflect their clarifications.
Dive Brief:
- A federal judge ruled last week that, in a seven year legal conflict against Swift Transportation, some of the owner-operators of Swift's vehicles should be classified as employees, not independent contractors. The case is therefore not subject to arbitration, but can remain in federal court, The Wall Street Journal reported Thursday.
- In his decision, U.S. District Judge John Sedwick concluded that Swift had "full control of the terms of the relationship," as owner-operators who leased trucks from the Swift subsidiary from a practical standpoint had to drive for the company. Swift has filed a notice of appeal in the U.S. Court of Appeals for the Ninth Circuit.
- Pending the results of the appeal, the case may now move forward in federal court to decide whether the plaintiffs are owed back pay by Swift. If successful, a decision could open the door for other drivers who may have been similarly misclassified. The Wall Street Journal adds that Swift classified 4,391 drivers as owner-operators as of last quarter.
Dive Insight:
The present case against Swift extends the labor battle over employee misclassifications to trucking companies, which have long employed workers on a contract basis. While such battles in the trucking industry are commonplace due to owner-operators' status with companies, and subsequent dependency on certain companies or jobs, the popularization of the "gig economy" has placed increased pressure on the Department of Labor to better clarify and review the conditions upon which a worker can be labeled an independent contractor.
At issue is whether the workers in question are in fact independent contractors, meaning that while they are employed by Swift, they are not considered employees and therefore subject to certain employee protections and benefits. Cases involving Amazon, Uber, and FedEx have garnered similar significant national attention, perhaps empowering others recognizing significant similarities in conditions.
As workers fight back against the independent contractor loophole on employment standards, a case can be made that it is increasingly problematic for employers as well, with big back payouts becoming increasingly common.
The Swift case must still be decided in court, but The Wall Street Journal adds the transportation company recently set aside a reserve of $22 million for a class action case against a subsidiary. Since many independent contractor cases are settled on a case-by-case basis, class action cases are harder to push through. Just like the classification of drivers, though, the legal precedents show only a wide gray zone.
