
A federal court in Illinois has resurrected an employment misclassification lawsuit filed by independent contractor truck drivers who worked for Sparc Transport.
On Nov. 22, Judge Elaine Bucklo of the U.S. District Court for the Northern District of Illinois denied Channahon, Ill.-based Direct Trucking, doing business as Sparc Transport, its motion to dismiss an amended complaint. The decision puts the lawsuit back into play after it received a major setback earlier this year.
In addition to class-action misclassification claims, the lead plaintiff in the lawsuit is suing the trucking company over a predatory lease-purchase agreement, an issue plaguing the industry.
Driver control
Pedro Baez filed the lawsuit against Sparc Transport last December, accusing the company of exerting complete control of drivers’ operations despite them being hired as independent contractors.
According to the complaint, Sparc Transport deducted up to thousands of dollars from his pay each week. Deductions included truck payments, insurance, tolls and a fuel card. Sparc Transport also charged a $5,000 escrow, which never was repaid to Baez.
Baez did not control which loads he hauled. Rather, he was required to regularly check in with Sparc Transport dispatchers, who told him which loads to haul and when and where to pick them up. When making deliveries, he had to meet strict time constraints set by the company.
Other aspects of driver control included:
- Drivers required to comply with instructions dictated by written and unwritten policies, procedures and directives regarding drivers’ duties
- Drivers required to report to or contact dispatchers employed by Sparc Transport each day, at which time drivers were provided with delivery assignments
- GPS devices installed on trucks, allowing the company to track drivers throughout the day
- Drivers required to undergo background checks and drug testing prior to being hired
- Drivers required to give timely advance notice for any time off; failure to do so would result in discipline or termination
Typical of employee drivers, the independent contractors were not allowed to have their own customers. Additionally, they did not have the authority to negotiate pay with customers. Instead, independent contractors were compensated by Sparc Transport.
Lease-purchase allegations
Separate from the class-action misclassification claims, Baez also has accused the company of a predatory lease-purchase agreement.
Since Baez did not own a truck when he began working for Sparc Transport, he entered into an “installment sales contract” to purchase one from the company. Baez made monthly payments toward ownership of the truck.
When he stopped working for the company, Sparc Transport told him he could not use the truck to work for another company. He was forced to return the truck after paying thousands of dollars in payments. According to the complaint, nothing in the contract states that Baez needed to continue driving with Sparc Transport in order to purchase the truck.
Temporary setback
The lawsuit was dismissed in May over a technical error.
In the original complaint, Baez is recognized as a “citizen” of Indiana. Sparc Transport President Edward Kim, on the other hand, is described as a “resident” of Illinois. Diversity jurisdiction requires plaintiffs and defendants to be citizens of different states. Since Baez used the word “resident” for Kim, not “citizen,” the judge dismissed the case based on that technicality.
There was also an issue of whether Baez established that the amount in controversy exceeds $75,000. With the case dismissed on other grounds, that issue was not addressed.
A week after the dismissal, Baez filed an amended complaint that was nearly identical to the original. In addition to changing the word “resident” to “citizen,” the new complaint included one additional paragraph explaining how Sparc Transport owes more than $75,000.
Sparc Transport filed a motion to dismiss the amended complaint. Among its arguments, the company said that the new complaint “does not plausibly allege an amount in controversy
exceeding $75,000.” However, the judge found the amended complaint sufficiently addressed the original complaint’s deficiencies. Therefore, Baez’s class-action misclassification lawsuit will proceed, including his lease-purchase claims. LL
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