When the California Supreme Court issued its 2018 ruling in Dynamex Operations v. Superior Court, in the State of California, the decision jolted the business world by making it more difficult to designate workers as independent contractors. And more recently, when the State codified Dynamex in the legislative process, under California Assembly Bill 5 (AB5), even the gig economy was struck at its very core.
On September 13, 2019, the U.S. District Court for the District of Massachusetts granted certification of a class of independent contractor drivers who delivered packages through Dynamex Operations East for Google Express. Ouadani v. Dynamex Operations East LLC, No. 16-12036, 2019 WL 4384061 (D. Mass. Sept. 13, 2019). Ouadani, a delivery driver, sued Dynamex on behalf of himself and all others similarly situated, alleging he was misclassified as an independent contractor in violation of federal and state wage laws. Ouadani sought class certification on two of those claims – improper deductions to drivers’ paychecks and misclassification under Massachusetts law – and sought partial summary judgment on the Massachusetts misclassification claim. In its ruling, the Court refined and certified the plaintiff’s proposed class, holding that it would not be too taxing to resolve the workers’ claims on a class-wide basis despite variations in their work experiences.
At issue in the misclassification claim were two prongs of the Massachusetts Independent Contractor Statute regarding whether a worker has been properly classified as an independent contractor: (1) that the worker is free from the putative employer’s control both under contract and in fact (known as “Prong A”); and (2) that the worker is customarily engaged in an independently established business of the same nature (known as “Prong C”).
This now brings employee misclassification to each coastline of the United States. It also brings Dynamex into the Deep South. On 08 May 2018, Elizabeth Elinknan sued RP Field Service LLC and National Creditors Connections, Inc. (NCCI) with respect to the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 – 219. Elinknan filed her action as a putative claim on her and other plaintiff’s behalf claiming that she and others were misclassified as independent contractors when they were actually employees. She additionally amended her petition when RP Field Services terminated her and stated that this was in retaliation for bringing suit. To date 39 others have opted into the suit and the Court has determined that there is a pool of 397 aggrieved parties.
Over the following months, both parties met in mediation and finally agreed to a Settlement in the amount of $497,000.00. That Settlement was submitted to the US District Court for the Southern District of Georgia in Savannah. Presiding was the Honorable William T Moore, Jr.
While the aforementioned is noteworthy enough to publish upon, Judge Moore’s ruling was a shot heard around the Industry. And Judge Moore’s rationale brings hope to many whom believe that the federal judiciary has always been skewed to protect the interests of National Association of Mortgage Field Services (NAMFS) Members.
The first benchmark to meet was a determination of whether or not Elinknan had a proper FLSA matter and that Elinknan had others whom were similarly situated and had opted into the suit. Judge Moore had this to say in his ruling,
In this case the Court will conditionally certify the FLSA collective for settlement purposes at this time. Plaintiff has properly demonstrated that there are others who desire to participate in this suit as at least thirty-nine other plaintiffs have joined the suit since its initiation.
More importantly, they were all classified as independent contractors and paid under the same task-based payment scheme.
The Court then went on to laboriously examine the proposed Settlement of $475,000, which the lawyers were to be paid $600 per hour for, totaling over 1/5th of the entire amount,
In this case the Court is unable to approve the parties’ proposed settlement at this time. In the Court’s view, the parties’ assertion that the proposed settlement is a fair and reasonable resolution of all of the claims in this action is premature. At this point, none of the putative plaintiffs have had any opportunity to participate in this action or the settlement of their own claims.
This is a historic position taken notwithstanding the fact that the federal judiciary in the South are extremely conservative. What is in play here is the simple and salient fact that NAMFS members, time and again, attempt to obfuscate any information pertaining to the rights of Labor. And in this case, the Court saw through the smoke and mirrors. Judge Moore’s ruling went on to confirm this,
These potential plaintiffs have not received any notice of the proposed settlement of their claims and have had no opportunity to object to the settlement terms. The Court is unable to assess if the settlement is fair or reasonable when potential plaintiffs are not even aware that their claims have been settled.
In the instant case, the Court determined that 397 potential plaintiffs were involved. I want that number to sink in for just a moment. Here is where some basic math is important,
Thirty nine original plaintiffs stood to make $497,000. That means the current pool of 39 is 9.82% of the total pool. You could extrapolate the ultimate settlement to be in the neighborhood of FOUR MILLION DOLLARS!
Transparency. Transparency is the currency in which NAMFS members fear they will have to conduct business in. Judge Moore saw through RP Field Services’ charade as well as the lawyers whom attempted to enrich themselves without having to consider the entire pool of disenfranchised Labor. With respect to the Elinknan case, it is the typical NAMFS mentality coming back to roost.