California-based trucking company Seacon Logix must pay $107,802 after losing an independent contractor misclassification case despite having an agreement with workers labeling them as ICs, according to the California Labor Commissioner’s Office. The incident shows some states continue to target misclassification and even IC agreements may not be enough to thwart litigation in some cases.
A state court found in February that Seacon Logix Inc. drivers at the Port of Long Beach in California were employees and not independent contractors, California Labor Commissioner Julie Su announced last month.
“In this case, drivers had signed agreements labeling them independent contractors, but the court saw the truth behind the label,” Su said in a press release. “The court found that the company exerted sufficient control over the drivers such that the drivers were employees of the company and thus, enjoy all basic labor law protections.”
The drivers claimed unreimbursed business expenses and unlawful deductions, including weekly truck rental fees and liability insurance costs for the Seacon Logix trucks they drove, according to the Labor Commissioner’s office.
A Labor Commissioner hearing on Nov. 16, 2011, resulted in Seacon Logix being ordered to pay drivers $105,089. However, the company appealed the decisions to the California Superior Court in Long Beach, which upheld the Labor Commissioner’s decision. The firm is now required to pay $107,802, which includes interest.
The money will go to the drivers.