April 29, 2024
The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, filed a complaint in the US District Court for the District of New Mexico, challenging the US Department of Labor’s new rule on when workers can be classified as independent contractors.
Representing the family-owned company Colt & Joe Trucking, NCLA on April 25 asked the court to overturn the new rule, alleging it leaves small businesses like theirs unable to hire independent contractors without risking liability under the Fair Labor Standards Act.
“The department is replacing a simple standard for determining whether a worker is an independent contractor or employee under the act with a vague and indecipherable one,” Sheng Li, litigation counsel for NCLA, said in a press statement. “A vague standard means businesses have no idea what the law requires, while bureaucrats enjoy enormous power to penalize them for unpredictable violations.”
The lawsuit asks the court to enjoin the defendants from enforcing the 2024 rule; declare the 2024 rule unlawful and set it aside; award attorneys’ fees and costs to the plaintiff as a prevailing party; and award the plaintiff any additional relief that the court deems just, proper or equitable.
It also asks for a jury trial.
“The department has abruptly and arbitrarily reversed course with a new rule, published in January 2024, that makes clear that control over the work and an opportunity for profit are not generally sufficient to enable a business to classify workers as independent contractors under the Act,” the complaint states. “The new rule further replaces the simple and objective control-and-opportunity standard with an open-ended balancing test that obscures the distinction between contractors and employees, making it impossible for businesses like plaintiff to hire independent contractors without risking FLSA liability.”
Bloomberg Law reports it is the second such suit to be filed by a family-owned trucking company. In addition, the US Chamber of Commerce in March sent a letter to US senators and House members to encourage them to reject the US Department of Labor’s new final rule covering independent contractor misclassification.