Politics & Government

Labor law court cases on the rise

Workers fighting to have their bosses treat them as employees are squaring off in the courts more and more in recent years.

But the resolution they find varies greatly, depending on the collective strength of the workers and the depth of the companies’ pockets.

The workers who find resolution – and multimillion-dollar payouts – in the courts prevail in large part because they are joining forces in taking on some of the biggest companies in America. For other workers, success in the courts can be elusive. A single worker, or a small crew, taking on a business with modest holdings often faces overwhelming obstacles and long delays.

“It’s a big headache,” said Edy Solares, a 38-year-old truck driver who has struggled to recoup more than $145,000 that the California labor commissioner said he was owed from a former boss.

The disparity comes amid increased court action across the country. Private-action federal Fair Labor Standards Act cases have increased in recent years. In fiscal year 2013, more than 7,700 cases were filed, up from 5,302 in 2008.

The rise in lawsuits coincides with the growth of a scheme called misclassification. Companies try to cut costs by wrongly classifying regular employees as independent contractors, to avoid tax obligations.

Cases have been filed by state officials and the Obama administration, which has been pushed by organized labor to crack down on a practice that often cuts workers out of overtime pay and employee protections.

But the expansion in lawsuits largely has been in the private sector, with the biggest payouts coming in class-action suits. Alfred Robinson, a former acting administrator of the Department of Labor’s Wage and Hour Division, said lawyers have capitalized on provisions of the Fair Labor Standards Act to minimize the risk for themselves and boost financial winnings.

In one recent case, more than 2,300 FedEx drivers wrongly classified as independent contractors could receive hundreds of millions of dollars after a U.S. Circuit Court of Appeals ruled this year in the employees’ favor.

But in other cases in state and federal courts, workers have been reluctant to challenge such practices for fear of losing work. Many are low-skilled immigrants. They don’t have money to hire a lawyer for a case that could take years.

Solares drove a delivery truck filled with metal and materials to remodel kitchens across the Los Angeles metro area. He thought justice had prevailed when the California labor commissioner ruled that his boss owed him more than $145,000 after wrongly classifying him as an independent contractor.

Solares, who came from Guatemala and is in the United States legally, and his wife talked about buying a home and putting money aside for their three kids’ college education. But more than a year later, they’ve only been able to recover a fraction of the award.

“When we got that letter, the family celebrated,” Solares said. We were happy. But now, today, we’re still in the same place. We have nothing.”

In California, only 17 percent of workers who won wage cases before the state’s Division of Labor Standards Enforcement were able to recover any payment at all between 2008 and 2011, according to the UCLA Labor Center.

“The difficulty is not in winning your claims for unpaid wages or proving you’re an employee as opposed to an independent contractor,” said Tia Koonse, the center’s legal and policy research manager. “The difficulty is in collecting.”

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