Judge Sides With Seattle-Based Drayage Firm, Says Drivers Properly Classified as Contractors

This story appears in the June 2 print edition of Transport Topics.

A Seattle-based trucking company won summary-judgment dismissal of three of four civil counts when a U.S. District Court judge ruled the carrier’s drivers were legitimately classified as owner-operators.

Chief District Judge Marsha Pechman granted summary judgment in favor of drayage carrier Seattle Freight Service, thereby dismissing complaints on federal and state law wage-violation claims, unlawful workplace retaliation claims and negligence and emotional distress claims.

Pechman’s order also let stand a claim on hostile work environment, which was still in nonbinding mediation as Transport Topics went to press. If mediation fails, the case would go to trial in July, said the attorney for SFS, Lucy Russell Clifthorne.

“Plaintiffs are ultimately in business for themselves, suggesting independent contractor status,” Pechman’s order said. “The court concludes Plaintiffs were independent contractors. As a result, the Court grants summary judgment on the [Fair Labor Standards Act] and Washington wage law claims.”

The judge’s order is the result of Aynalem Moba and 24 other owner-operators filing a federal civil lawsuit in Seattle last year against Seattle Freight Service, which provides drayage to and from the ports of Seattle and Tacoma, Washington, among other services. The company’s website says it operates 125 power units.

Pechman used a six-part test to decide whether Moba and his colleagues should be considered employees or contractors. That test is mandated by the Ninth U.S. Circuit Court of Appeals when there is a claim under the federal Fair Labor Standards Act. All points leaned toward the drivers being classified as owner-operators, she said.

The six parts of the test were:

• Control of manner and means in which work is performed

• Opportunity for profit or loss based on managerial skill

• Investment in equipment by the individual and his or her ability to employ others

• Amount of skill or judgment required

• Permanence of the working relationship

• Integral nature of the job performed relative to the total business

Once classified as independent contractors, the 25 drivers could not sue based on the FLSA, which offers wage protections for employees.

Plaintiffs’ attorney Lawrence Hildes of Bellingham, Washington, disagreed with Pechman’s order but said he is concentrating on the mediation of the fourth point.

“I think she’s wrong on the other issues,” he said.

“We will wait and see on an appeal based on what happens in mediation,” Hildes said, adding that if his clients receive adequate compensation on the hostile work environment claim, they would not appeal.

Among his 25 clients, only one still drives for SFS. The others had their contracts terminated, Hildes said.

An SFS attorney and the company’s general manager, George Maitland, declined to discuss the case in detail until it is completely  concluded.

Hildes claimed that, historically, port truckers have been employees who were organized by the Teamsters union, and he thinks that should be the case again.

“Right now, these port drivers have all of the disadvantages of being owner-operators and none of the advantages,” Hildes said.

Pechman’s background summary for the case said the owner-operators are of “East African ethnicity.” That is related to the fourth claim that was allowed to proceed.

Moba alleges he and the other plaintiffs were subjected to racial slurs, according to Pechman’s order.

Pechman also quoted an SFS executive who defended the company saying, “ ‘There was absolutely no culture of bigotry, bias or racial animus of any kind at the company.’ He says he ‘never heard a single racial epithet used’ by anyone at Seattle Freight.”

The retaliation claim concerns decreases in jobs offered to the 25 drivers. SFS said that was because of changes in offers made to the carrier as the western Washington freight market was changing significantly.

“Plaintiffs [drivers] failed to rebut this evidence, so defendants [SFS] are entitled to dismissal of this claim as a matter of law,” Pechman ordered.

On April 28, Pechman ordered the 25 plaintiffs to cooperate fully in depositions and answer questions from defense counsel. Several weeks later, Pechman ordered the 25 plaintiffs to pay Seattle Freight $6,216 for legal fees.