Overdrive Magazine

April 2019

Issue link: https://dmtmag.uberflip.com/i/1099576

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24 | Overdrive | April 2019 Swift Transportation appears to be among fleets with California opera- tions that are shying away from leas- ing owner-operators in the state due to legal developments regarding inde- pendent contractors. Some fleets are encouraging leased operators to become company driv- ers or secure operating authority and receive brokered loads from the fleet. The practice is seen as a safer stance following a California court decision that casts doubt on the legality of owner-operator leasing in the state. Joe Rajkovacz, head of govern- ment affairs for the Western States Trucking Association, said WSTA has helped some Swift owner-operators transition to independent operators. Officials from Swift and its parent company, Knight-Swift Holdings, did not respond to inquiries. The com- pany operates about 30,000 trucks. Two owner-operators confirmed they received notice from Swift that they had to make a decision on a sta- tus change by March 2. Both opera- tors declined to speak for attribution. Rajkovacz estimated that given Swift's and Knight's heavy presence in the West, as many as 1,000 of the 5,000 owner-operators used by Swift or its sister companies such as Knight and Barr-Nunn could be affected. One owner-operator told Overdrive he was presented with options by management at his Los Angeles-area operation to either become a com- pany driver and continue his local/ regional account or obtain an out-of- state address and run more than half of his miles outside of California. He said he'd heard that lease-pur- chase drivers were offered $2,500 to buy out their lease and become com- pany drivers. They also received the option to finance the remaining por- tion of their truck and use the same out-of-state address option available to those who own their trucks. A Swift employee in Southern California, not speaking for attri- bution, said the move reflects the company's response to the California Supreme Court's Dynamex v. Superior Court of Los Angeles decision last year. The court used the ABC test for determining contractor classification. Swi reportedly adopts leasing work-around B U S I N E S S Court rulings over the past year have created more legal uncertainty around independent contractor relationships in California for Swift and other carriers. BY TODD DILLS AND JAMES JAILLET $100M settlement reached with contractors Swift Transportation last month agreed to a $100 million settlement with certain current and former truckers to end a nearly 10-year legal fight with drivers claiming they were misclassified as contractors. The driv- ers argued they should be classified as company drivers, eligible for mini- mum wage and other benefits. Some 19,000 drivers may be eli- gible to join the class. They will receive payments averaging more than $5,000, though payouts will be based on length of employment, the ultimate number of eligible class members and other factors. Those who drove for Swift as far back as 1999 could be eligible. Members of the class include any drivers who, prior to Jan. 1, 2019, entered into an independent contrac- tor agreement with Swift and had a lease agreement with Swift subsidiary Interstate Equipment Leasing. Swift said in March it had no com- ment on the settlement agreement. According to court documents, negotiations began in earnest to settle the class action lawsuit in September 2017 and were prompted by the company's merger with Knight Transportation. Court documents cite mounting legal concerns in California as one reason why the parties reached the settlement. The documents also refer- ence the recent U.S. Supreme Court decision, Oliveira vs. New Prime, as weighing against Swift.

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