National Consolidated Couriers Inc., based in San Leandro, Calif., but with clients across the country, has agreed to a court judgment requiring it to pay $5 million in back wages and damages to more than 600 drivers it misclassified as independent contractors, having cheated them out of minimum wage and overtime pay.
The judgment reveals that, during the course of the investigation by the Department of Labor (DOL), the employer tried to destroy records showing an employment relationship with its drivers, and had been misclassifying the workers over at least a five-year period.
In another major win for workers, a federal judge ruled that drivers for Mountain View-based Stanford Yellow Taxi Cab Inc. were also misclassified.
On its website, Stanford touts it strong relationships with corporate account holders such as Google, and the Four Seasons and Rosewood hotels. In this case, the department had to file suit to stop Stanford Cab from threatening and intimidating its drivers who were cooperating with investigators, including an instance where Stanford fired a worker just days before trial to discourage his testimony. The court’s decision allows the DOL to continue with litigation forcing the company to pay nearly $3 million in back wages and damages to dozens of drivers.
“Misclassification is workplace fraud, plain and simple,” said Secretary of Labor Thomas E. Perez. “It hurts workers by denying them a fair day’s pay for a fair day’s work, and it also undermines the competitiveness of businesses that are playing by the rules. At the Labor Department, through vigilant and vigorous enforcement, we are cracking down on irresponsible employers who game the system and cheat their employees — and that’s what they are: not contractors, but employees.”
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