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New York “Black Car” Drivers Found to be Independent Contractors

Recently, courts in highly-publicized independent contractor misclassification cases in the transportation sector have issued determinations finding the workers to be employees.  However, a recent decision from the Southern District of New York demonstrates that there are independent contractor business models in the sector that will be upheld by the courts.  In Saleem v. Corporate Transportation Group. et al., 1:12-cv-08450-JMF (S.D.N.Y.), chauffeurs for a “black car” claimed they were not self-employed but rather were employees entitled to overtime under the under both the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”).

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Judge Jesse M. Furman recently granted Defendants’ motion for summary judgment and dismissed their case.  He found that the chauffeurs were in fact correctly classified as independent contractors under both statutes, and therefore not subject to the wage requirements of the state and federal wage laws.   Judge Furman reached this conclusion in part based on his findings that the drivers:

  • Set their own schedule of work and could reject jobs at will;

  • Were free to—and frequently did—work for other car services and provide transportation to private customers;

  • Made numerous decisions that affected their overall profitability, such as whether to rent or buy a franchise, work for other car service companies, hire other drivers, and solicit private clients;

  • Exercised a significant degree of independent initiative and took affirmative steps in order to book jobs;

  • Classified themselves as independent contractors on their tax returns;

  • Received no benefits from Defendants;

  • Received no salary but only retained a percentage of the fares; and

  • Could terminate the franchise agreements at will.

Although this decision is encouraging, particularly for companies in the “black car” industry, it is important to remember that this determination, like all employment classification inquiries, is based on the specific facts of the case.   Businesses should conduct a self-assessment of their independent contractor models – ideally with the assistance of counsel and subject to privilege – to determine the risk of a challenge from their independent contractors or government agencies.

© 2018 Proskauer Rose LLP.

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About this Author

Guy Brenner, Labor Attorney, Proskauer Rose, arbitration proceedings Lawyer
Partner

Guy Brenner is a partner in the Labor & Employment Law Department and co-head of the Non-Compete & Trade Secrets Group. He has extensive experience representing employers in both single-plaintiff and class action matters, as well as in arbitration proceedings. He also regularly assists federal government contractors with the many special employment-related compliance challenges they face.

Guy represents employers in all aspects of employment and labor litigation and counseling, with an emphasis on non-compete and trade secrets issues,...

202-416-6830
Carolyn M Dellatore, Labor Employment Attorney, Proskauer Rose law firm
Associate

Carolyn M. Dellatore is an Associate in the Labor & Employment Law Department and a member of the Employment Law Counseling & Training Group, resident in the Newark office. Her practice focuses on the representation and counseling of employers in all areas of employment and labor relations.

973-274-6032