A U.S. appeals court decided that an airport shuttle operator who accused his employer of misclassifying him as an independent contractor, and thus failed to properly pay him, must pursue his claims via arbitration. The man sued the company under the Fair Labor Standards Act and the Maryland Wage and Hour Law, also filing wage and hour" claims on the behalf of other drivers he claimed were incorrectly classified. A Maryland district court previously ruled that a class action waiver and other stipulations in the shuttle company's franchise agreement protect the man from being ordered to arbitrate, but the Appeals court overruled that decision, citing a Supreme Court case in which the highest court found that class action waivers do not necessarily prohibit arbitration agreements from being enforced.
The driver, who worked on behalf of the shuttle company at a Maryland airport, asserts that the company wrongfully classified him as a franchisee rather than an employee. He says this allowed the company to mislead him regarding the pay he would receive, as contractors are not necessarily entitled to the minimum wage and overtime pay enjoyed by full-time employees.
According to an arbitration agreement that the man signed with the company, each party must cover half of all expenses associated with arbitration. The district court suggested that this would make it impossible for the plaintiff and other drivers from pursuing wage claims, but a previous Supreme Court ruling found that claimants must first prove that arbitration would be prohibitively expensive before the court may render an arbitration agreement invalid. The appeals court decided that the driver failed to show substantial evidence that court-ordered arbitration would be too costly for him to pursue.
State laws governing employment, contracts, wages and other similar issues are typically complex and difficult to understand, making it crucial for any company facing a lawsuit regarding such matters to contact a qualified attorney specializing in employment litigation. This is the best way for a Maryland business to ensure its rights and interests are properly protected in court.
Source: Bloomberg BNA, "Shuttle Driver Must Arbitrate Wage Claims, Despite Class Acton Waiver, Court Decides" Kevin P. McGowan, May. 08, 2013