Hunton Retail Law Resource

Earlier this month, a group of former delivery drivers filed a putative collective action lawsuit against an online retailer and Courier Logistics Services, LLC (“CLS”). The case is pending before the United States District Court for the District of Arizona. The plaintiffs allege that the two companies willfully misclassified them as independent contractors and denied overtime pay properly due under the federal Fair Labor Standards Act (“FLSA”).

As alleged in the complaint, the plaintiffs and other similarly situated drivers were engaged to perform rapid deliveries to mobile app customers. Plaintiffs, wearing shirts and hats bearing the online retailer’s logo, reported to the company’s warehouse 15 minutes before their shift was to begin, checked in with the dispatcher and received their deliveries for the day (which they allegedly could not refuse). Each driver carried a smart phone provided by both companies that was preloaded with the rapid delivery mobile application. The application provided drivers’ routes and directions each day and permitted packages and drivers to be tracked. Drivers drove their personal vehicles. Drivers concluded each day back at the warehouse, where they checked in with the dispatcher. Each of the plaintiffs earned $16 per hour.

The plaintiffs sued both companies under a joint employer theory. In support of that theory, the complaint alleges that the online retailer and CLS each could (1) hire or fire delivery drivers, (2) set drivers’ wages, (3) control the manner in which they performed their work, and (4) control their working conditions. The complaint further alleges that each company suffered or permitted the plaintiffs to work and engaged them to perform work. The plaintiffs claim they understood that they worked for both entities “as a whole,” not just one entity.

Numerous retailers have been sued as joint employers for alleged wage and hour violations in the last few years. This case is another reminder of the care with which companies should engage contractors to perform services, such as delivering goods. It is important to structure the relationship and services with the FLSA in mind. Doing so will help minimize the risk of liability to vendors’ employees on FLSA wage claims under the joint employer theory.