Mass. court rules carriers can’t be compelled to make drivers employees

U.S. District Court Judge Denise J. Casper ruled that federal law precludes Massachusetts from regulating transportation rates, routes and services by requiring express delivery drivers to be company employees.

   U.S. District Court Judge Denise J. Casper has ruled that federal law precludes Massachusetts from regulating transportation rates, routes and services by requiring express delivery drivers to be company employees.
   Truck drivers have long argued that motor carriers have misclassified them as independent contractors and should instead treat them as full-time employees, a battle that has been playing out in courts across the country. FedEx Ground, for example, reached a tentative settlement for $228 million in June with plaintiffs in a lawsuit over drivers in California being paid as independent contractors from as far back as the year 2000.
   The Teamsters union has also accused several ports and terminal operators of misclassifying port drayage drivers in order to avoid unionization and cut costs, resulting in several West Coast drayage companies switching to an employee-driver model.
   Stephen Melnick of the Littler law firm, which represented the Massachusetts Delivery Association in the lawsuit challenging the state’s classification of express delivery drivers as employees under the state’s Independent Contractor Law, told JOC.com the Massachusetts case is “extremely significant.”
   The Massachusetts law is unique, but the court’s ruling continues a trend in which “state laws that have a significant effect on motor carriers’ rates, routes and services will be found to be pre-empted by federal law,” said Melnick.
   By enacting the Federal Aviation Administration Authorization Act (FAAAA), Congress intended that “motor carriers should be able to conduct their business in a uniform national way without having to deal with 50 different state tests on who is or is not an independent contractor,” he added.
   The court agreed with the association’s argument that the state’s regulation of a motor carrier’s “price, route or service” was preempted by the FAAAA. Judge Casper ruled that the drivers’ services fall within the carriers’ “usual course of business,” and subsequently, affects rates, routes and services that are subject to exclusive federal regulation.
   “The FAAAA expressly preempts certain state laws pertaining to motor carriers, stating that ‘a State … may not enact or enforce a law…related to a price, route or service of any motor carrier…with respect to the transportation of property,’” she wrote in the decision.
   The court said classifying drivers as employees would subsequently affect rates, routes and services by increasing overhead costs, decreasing driver flexibility and likely eliminating on-demand pickups.