NEWS ITEM

Ninth Circuit Reinstates Class Action Lawsuit By Delivery Truck Drivers

Reverses Grant of Summary Judgment to Employer

July 13, 2010 -- The Ninth Circuit today issued a published decision reversing a district court's grant of summary judgment in favor of EGL, Inc. and Eagle Freight Systems, Inc., in a class action suit bright by delivery truck drivers asserting wage and hour claims under the California Labor Code. The district court had applied Texas law in determining that, as a matter of law, the drivers, who performed work in California, were independent contractors rather than employees. The Ninth Circuit decision revives the drivers' class action lawsuit.

The district court's application of Texas law was based on a choice-of-law provision contained in a contract the drivers were required to sign. The district court had also held, in the alternative, that under California law the drivers were independent contractors and therefore could not pursue their California Labor Code claims.

The Ninth Circuit initially determined that the Texas choice-of-law provision contained in the drivers' contract did not cover the drivers' statutory claims. The Ninth Circuit then explained that under California law there is a presumption in favor of employee status and held that EGL could not overcome that presumption, particularly in light of factors weighing in favor of employee status: among others, that the delivery services provided by the drivers were central to EGL's operations; the detailed instructions given to the drivers; EGL's control over drivers' schedules, work for other companies, appearance, vehicles, and use of assistants; the long-term and at-will nature of the contracts; and the low level of skill required to perform the drivers' jobs. The Ninth Circuit also found that the drivers' contractual agreement that they were independent contractors was not significant under California law. It therefore reversed summary judgment and remanded to to the district court for further proceedings, reviving the drivers' class action law suit.

Altshuler Berzon LLP represents the plaintiffs, together with Hinton Alfert & Sumner.

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