CR England Allegedly Misclassified Thousands of Truck Drivers

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan

C.R. England Inc. is accused in a lawsuit of misclassifying its truck drivers as independent contractors, rather than employees, to deprive them of retirement, health, and other benefits ( Silva v. C.R. England, Inc. , S.D. Cal., No. 3:17-cv-02099-LAB-JLB, complaint filed 10/12/17 ).

CRE has been withholding benefits because some of its truck drivers have been classified as independent contractors for decades, according to a lawsuit filed Oct. 12 in the U.S. District Court for the Southern District of California. CRE engaged in a scheme to undermine Employee Retirement Income Security Act protections, including the law’s vesting requirements, and to deny or otherwise limit benefits the law requires, the lawsuit alleges.

Salt Lake City-based CRE employs thousands of truck drivers to exclusively transport goods on the company’s behalf, according to the lawsuit. The family-owned company, founded in 1920, provides refrigerated transportation services, according to its website.

This isn’t the first time truck drivers have challenged employer practices treating them as independent contractors rather than employees. J.B. Hunt Transport Inc. was sued in 2015 under state law for allegedly depriving its drivers of employee benefits. After a federal judge held that the drivers’ state-law claims were barred by ERISA, the parties agreed to dismiss the case.

Recently, lawsuits challenging the classification of workers under ERISA have been more common in the insurance industry. Major insurance companies, including Allstate Insurance Co. and American Family Insurance Co., are currently defending long-running lawsuits over the alleged misclassification of their agents.

Former CRE driver Carlos Silva alleges that CRE extolls the virtues of business ownership by promising to treat its drivers as independent contractors. However, CRE doesn’t honor this promise of independence because it retains a right to exercise control over the manner and means by which drivers conduct every material aspect of their business.

According to Silva, CRE employs truck drivers that it classifies as employees, who are entitled to company benefits. He alleges that there are no “material differences between the manner and method” in which it controls the drivers employed as employees and the contractors, except that contractors are deprived of receiving company benefits.

Silva seeks a declaration that he and other potential class members are legal employees for all purposes, unpaid benefits, and an order reforming the company’s health and retirement plans to include them, among other remedies.

CRE didn’t immediately respond to Bloomberg Law’s request for comment.

Blumenthal Nordrehaug & Bhowmik LLP and Butterfield Schechter LLP represent the proposed class.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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