California Truckers Win Battle in Bid for Overtime Pay

Several California truckers filed a suit to recover overtime pay and expenses.  But the trucking company argued that the truckers had signed a form contract designating themselves as independent contractors.  Independent contractors are not entitled to overtime pay. 

The truckers lost at first and appealed their case.  The Court of Appeal handed the drivers a victory by holding that the form contract did not matter.  The case is Narayan v. EGL, Inc. and the Labor & Employment Blog has a nice post on the case. 

Genuine independent contractors are not entitled to overtime pay so the key question was whether the drivers were employees or independent contractors.  This is where the form contract came into play.   When the drivers were hired, they each signed a contract that said they were independent contractors and that the laws of Texas would apply to any dispute.   So EGL said that the drivers already agreed that they were not employees and told the California court that the laws of Texas should apply.   

But the California appellate court held that the form contract did not govern these issues.  First, the court held that the laws of California would apply because the drivers worked in California and their claim for benefits did not arise under the contract. 

Second, the court held that the truck drivers were  not necessarily independent contractors just because the form contract said so.  The California Labor Code has a test to determine if a worker is an employee or an independent contractor. The court held that the acknowledgment in the form contract of independent contractor status is "simply not significant under California's test of employment."  Therefore the California test must be applied to determine the drivers status. 

This is a win for employee rights because this decision shows that an employee cannot be forced to waive certain rights in a form contract.  Importantly, employees should not assume that they are independent contractors just because a contract says so.  These employement contracts do not determine an employees real status.  Instead, the California Labor Code governs.