Delivery Drivers Are Employees, Not Independent Contractors, Ninth Circuit Rules

Sometimes a title tells you all you need to know. If you listen to the 1969 Pink Floyd track, "Several Species of Small Furry Animals Gathered Together in a Cave and Grooving with a Pict," you pretty much know what you are going to get. Sure enough, the track consists of four-plus minutes of noises resembling rodents and birds, with echoes (they're in a cave, remember?) and other effects.

Sometimes a title tells you nothing. If you look up the lyrics to "Careful with that Axe, Eugene," which appears on the same album, you'll get nothing. No matter how much you want to know who Eugene is and why he should be wary of that axe, no words can be found. It's an instrumental.

The Ninth Circuit's view of independent contractor relationships is all axe and no furry animals. Ignore the titles and be careful. You might get hurt.

In Ruiz v. Affinity Logistics Corp., Case No. 12-56589 (9th Cir. June 16, 2014), the plaintiffs performed delivery services in California for the defendant under contracts that provided both that the relationship was governed by Georgia law and that the drivers were independent contractors. They asserted in a putative class action that they should have been paid sick leave, as well as other employment benefits under California law, but had been misclassified. The district court originally applied Georgia law and, following a bench trial, entered judgment for the defendant on the grounds that the plaintiffs were indeed independent contractors. The plaintiffs appealed.

In the first appeal, in 2012, the Court of Appeals disregarded the parties' contract provision that said Georgia law would apply to any disputes and applied California law instead, finding that Georgia law was too favorable to the company's position. It then remanded the case for application of California law. Ruiz v. Affinity Logistics Corp., 667 F.3d 1318 (9th Cir. 2012).

On remand, and largely on the same record, the district court again entered judgment for the employer, but this time under California law. The plaintiffs again appealed.

In a decision issued June 16, 2014, the Ninth Circuit ruled that despite the contract terms to the contrary, delivery drivers for Affinity Logistics were employees under California law, not independent contractors. The Court of Appeals disregarded the fact that the drivers all had independent contractor agreements, formed their own corporate entities, paid for their own trucks, and could hire their own helpers.

Instead, based...