Another Federal Appeals Court reverses summary judgment in favor of U.S. Labor Department in IC misclassification case.

The U.S. Court of Appeals for the Eighth Circuit has reversed a district court’s grant of summary judgment in favor of the U.S. Department of Labor, finding that there were genuine disputes of material fact that should have been submitted to a jury regarding the appropriate worker classification of drivers providing services to a non-emergency medical transport company.  Travelon Transportation engages drivers to transport patients to and from medical appointments and assigns trips to drivers through an app on the drivers’ tablets. The district court, applying the economic realities test, concluded that the company violated the Fair Labor Standards Act due to its misclassification of the drivers as independent contractors and not employees. 

On appeal, the Eighth Circuit reversed and concluded that “issues of material fact remain as to the working relationship between Travelon and its drivers.”  The court noted that Travelon had offered evidence from which a rational trier of fact could find that three factors in the economic realities test –  “control,” “profits and losses,” and “integral to business” – weigh in favor of the drivers being independent contractors.” The Eighth Circuit also found that there was competing evidence about whether the drivers could reject trip assignments, the extent of control the company had over the drivers’ hours, whether the drivers could provide services independent of their work with the company, and whether the services rendered by the workers are integral to the business of the company.  The appeals court directed the district court, on remand, to resolve “these competing narratives” before it makes its legal conclusion as to whether an employment relationship existed between the Company and its drivers. Walsh v. Alpha & Omega USA Inc., No. 21-02961 (8th Cir. July 14, 2022)