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$28 Million Settlement Shines Light On Unfair Trucker Wages

$28 Million Settlement Shines Light on Unfair Trucker Wages

America’s truckers are an integral part of commerce. Without them, goods could not be efficiently transported between manufacturing and production centers to retail locations across the country. Truckers often work long hours, and in some cases, their wages do not match the efforts they put into keeping supply chains intact. Trucker wages recently received media attention when a Supreme Court trucker settlement caused a prominent transportation firm to agree to pay as much as $28 million to its drivers. This settlement is expected to influence trucker wage practices for years to come.

The New Prime, Inc. Settlement

Two class-action lawsuits were filed against Missouri-based trucking company New Prime, Inc. by drivers who alleged that they were unfairly paid by the company for work performed. One of the lawsuits, Oliviera vs. New Prime, was filed in 2015. After years of court battles, the Oliveira lawsuit and another, known as Haworth vs. New Prime, were settled. The Oliveira lawsuit went to the United States Supreme Court for a ruling on arbitration; in that case, the Court unanimously sided with the plaintiff. The Supreme Court trucker settlement opened the door for as many as 26,000 drivers employed by New Prime to receive a combined $28 million payout. These cases highlight the disparity between trucking companies and trucker wages.

Trucker Compensation Practices Being Challenged

The issue behind both cases is centered on prevalent concerns over trucker wages that span decades. Historically, truckers were paid by the mile instead of at hourly or annual rates. Truckers often perform work duties that are non-driving related, such as waiting at shipping terminals, filing paperwork, or assisting with loading or unloading duties. According to the U.S. Department of Labor, any work that is performed by employees on the job must be counted as hours worked. In the case of New Prime and numerous other legal cases, compensation for hours worked was withheld from drivers.

Another common practice within the transportation industry is the way in which trucking companies classify workers. In the $800 billion industry, just over a quarter of the 1.9 million truckers in the U.S. are owner-operators. Trucking owner-operators are often contracted to a company; in the case of New Prime’s classification of their truckers as contractors, the company believed it was not responsible for certain worker payment protections. In the Supreme Court trucker settlement, the Court ruled unanimously that the company’s contracted truckers were, in fact, employees, and were eligible for all of the protections afforded to employees by Federal law. 

Mounting Legal Challenges Against Transportation Firms

The New Prime lawsuits are only two of the most recent legal challenges against unfair pay practices in the trucking industry. In January 2020, a federal court in California ruled against Walmart, arguing that the retail giant violated worker protection laws when it didn’t pay truckers for non-driving work hours. The court stated that Walmart owed its truckers $54.6 million. Another lawsuit, decided in 2018, sided with the truckers when PAM Transport was ordered to pay its truckers hourly wages at least equivalent to the federal minimum wage for every hour they spent in the trucks while not sleeping, or about 16 hours a day. 

Cases go back even earlier. In 2017, a court in Nebraska ordered Werner Enterprises to pay a total of $780,000 in back wages after the company was accused of compensation violations. Another lawsuit in 2016 saw 6,000 drivers sharing a $2.35 million payout when their employer, C.R. England, was found to have violated fair compensation practices. 

Implications for the Trucking Industry

The Supreme Court trucker settlement has forced trucking companies across the nation to reevaluate their payment practices. These and other settlements may forever change worker classifications in the transportation industry as well. Industry analysts suggest companies can no longer classify their owner-operator drivers as contractors, and in many cases must provide fair and equitable compensation for non-driving work hours. As the transportation industry struggles with many risks and upheavals in the wake of the coronavirus pandemic, these rulings may ultimately pave the way for truckers to be rewarded for the essential work they perform – both behind the wheel and in many other aspects of this profession. 

About Gain Insurance Agency

Gain Insurance Agency protects trucking businesses against liabilities and claims in the industry. We combine products provided by respected insurance providers with our expertise and custom packages to meet customers’ individual needs. Our goal is to give you the coverage that you need at the lowest possible price. To learn more about our products and services, contact us today at (877) 424-3344.

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