Written by Erik Derr, Esq. & David Frankel, Esq.
Trucking company owners are well-versed in the potential tax exposure and legal risks of misclassifying employees as independent contractors. A recent federal court decision in the Northern District of Illinois further heightened this risk.
The court in Shumate v. Forsage, Inc., Case No. 1:24-cv-00931, held that an single employee can obtain a “conditional certification” for a class action lawsuit for violations of the Fair Labor Standards Act, 29 U.S.C. § 216(b) (the “FLSA”), by making a “minimal showing” that other employees are similarly situated. This “minimal showing,” the court found, can be made by providing factual support from declarations or affidavits of similarly situated employees, in addition to alleging similarity in a complaint.
In Schumate the plaintiff’s complaint was supplemented with just three affidavits from fellow employees setting forth facts demonstrating that they were subjected to common policies and practices regarding pay, deductions from their pay, and work requirements and conditions.
As a practical matter, trucking company owners should be warned that this minimal showing is sufficient, in at least one court’s eyes, to establish a class action claim for misclassification of employees as independent contractors under the FLSA.
The plaintiff in Schumate alleged that drivers should have been classified as employees because they:
- Drove trucks owned by Forsage and bearing its insignia;
- Were told by Forsage’s dispatchers which loads to haul, where to pick them up and drop them off, time constraints for deliveries, and had to report to Forsage staff;
- Drove trucks with GPS devices that Forsage could monitor;
- Drove for Forsage as much as 70 hours a week;
- Had to give advance notice to Forsage if they wanted time off (and could be subject to consequences such as discipline or termination if they did not);
- Had deductions taken from pay for insurance, truck cleaning, maintenance, and truck repairs;
- Did not receive reimbursement for out-of-pocket expenses incurred while driving on Forsage’s behalf; and
- Were effectively paid less than the minimum wage.
While the facts of every case and situation are unique, Schumate outlines that the bar continues to get lower and lower for FLSA misclassification class action claims against employers.