Second Circuit: “Black Car” Drivers are Independent Contractors Under the FLSA

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April 21, 2017

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A recent Second Circuit case confirmed that New York City “black car” drivers—workers who provide high-end transportation services, e.g., limousines—are independent contractors under the Fair Labor Standards Act (“FLSA”).

In Mazhar Saleem, et al. v. Corporate Transportation Group Ltd., et al., a group of drivers sued the company and some of its affiliates, alleging that the drivers were improperly classified as independent contractors (“ICs”). The district court found that the drivers were appropriately classified as ICs; the Second Circuit agreed.

In reviewing the case, the Second Circuit relied on the economic realities test, a list of standards intended to help determine if a worker is (A) able to effectively operate services on their own, and thus an independent contractor, or (B) economically reliant upon the employer, and thus an employee.  The economic realities test consists of several guidelines that employers must consider in totality; no single factor is more conclusive than another.  Review our past coverage of the economic realities test here.

The court found that, although some factors in the economic realities test pointed towards employee status, the black car drivers overall had significant control over their own operations and business ventures. Although the drivers relied upon Corporate Transportation and its affiliate dispatchers to determine clients and set and distribute fares, the drivers had control over who they wanted to pick up, personal fares not arranged by dispatchers, which black car services they would operate for, and the appearance of their own vehicles, as well as investment into the vehicle and franchise licenses.

The decision highlights the importance of carefully reviewing independent contractor requirements when considering employee classifications.

Action Items

  1. Have independent contractor classifications reviewed for consistency with this ruling.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2017 ManagEase, Incorporated.

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