Owner-Operator Trucker Is Independent Contractor

This newsletter usually only deals with cases that have gone to the appellate court. However, this case is so significant that it is presented before the appeal.

Even though this is a Superior Court case, the workers’ compensation case (LAO 75473) was joined with the Superior Court case by order of the Workers’ Compensation Appeals Board (WCAB), stipulation of the parties and order of the Superior Court.

This was a class action suit that was given to three judges for this decision.  The defendants in these cases were transportation services companies. The plaintiffs were owner-operators who drove trucks owned by the owner-operators for the trucking companies.

The trucking companies contracted with owner-operators who would haul for them and would enter into a Lease and Subhaul Agreement with Independent Contractor. It specifically states that the intent was to create and independent contractor relationship and not that of employee-employer.

Drivers who entered this agreement placed a decal on the side of the truck with the name of the company they were driving for and the ICC permit number under which the company operates.

The driver would report to a dispatch window to acquire a load to haul. The driver could accept or reject the load. A price list for the particular load would be available for the owner-operator to determine if they would accept or reject the load.

The owner-operator could provide a certificate that they had insurance coverage. The owner-operator could elect to obtain insurance for cargo loss, workers’ compensation, and liability and physical damage from the defendant. The owner- operator authorized the defendant to advance these costs which would then be subtracted at the time of settlement for the loads they hauled. Health insurance or other employee benefits were not supplied. There was a safety program which inspected the trucks.  The owner-operator was responsible for their own truck repairs. There was no withdrawal from checks for taxes or social security.

These judges reviewed the cases of Borello & Sons and SCIF V. BROWN. They found those cases provided little guidance. The judges looked at the issues of control, right to discharge at will without cause, distinct operation or business, supply of tools, etc, before determining they were independent contractors.

Case: Albillo and Montoya V. Intermodal Container Service et al.

Harvey Brown
3501 Jamboree Rd. Suite 602
Newport Beach, CA 92660

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