Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—S.D.N.Y.: Class certification denied for limo driver’s claims of employment misclassification, (Nov 20, 2013)

By Linda O’Brien, J.D., LL.M.

Current and former drivers asserting putative claims under the New York State Labor Law against a limousine transportation service operator for alleged improperly classifying them as independent contractors failed to show that their proposed class satisfied the commonality, typically, and predominance requirements of Federal Rule of Civil Procedure 23, the federal district court in New York City has held (Saleem v. Corporate Transportation Group, Ltd., November 15, 2013, Furman, J.).

Corporate Transportation Group, Ltd. (CTG) provides limousine transportation services to corporate and individual clients. Current and former drivers who worked for CTG filed an action claiming that CTG improperly classified them as independent contractors, thereby depriving them of overtime compensation due under the New York State Labor Law (NYLL).

The drivers had entered into agreements with defendant CTG franchisors, NYC 2 Way International, Ltd., Allstate Private Car & Limousine, Inc., Aristacar & Limousine, Ltd., and TWR Car and Limo, Ltd., which governed the terms of their relationships. Regardless of which franchisor a driver worked for, the majority of CTG work was received through an electronic dispatch system using a handheld device. The drivers submitted vouchers and credit card slips through CTG’s data processing services, which would process the forms and remit payment to the drivers.

The plaintiffs moved for class certification of their NYLL claims and defined the putative class as all drivers at any CTG franchise company in New York State within six years of the filing of the class action complaint.

Commonality. The court, in finding lack of commonality, determined that the plaintiffs first failed to show that all drivers signed substantially identical franchise agreements that would establish that the drivers were subject to the same policies for receiving work. Even if the franchise agreements were substantially identical, the documents would not be determinative of individual employment status, the court noted. Additionally, the plaintiffs did not demonstrate a level of homogeneity among CTG drivers with respect to performing their daily duties. Thus, the issue of whether CTG correctly classified the franchisors’ drivers as independent contractors could not be answered by common evidence but rather required individualized examination into the extent of control CTG exercised over each driver.

Typicality and predominance. The court also found that the plaintiffs failed to show that the class of drivers was sufficiently cohesive to warrant adjudication by representation and that resolution of the independent contractor classification question could be achieved through generalized proof. The individualized nature of the proofs in this case demonstrated that separate actions were more appropriate and no judicial efficiencies would be furthered by class treatment, the court concluded.

The case is No. 12 Civ. 8450.

Attorneys: Adam T. Klein (Outten & Golden LLP) for Mazhar Saleem. Evan J. Spelfogel (Epstein, Becker & Green, P.C.) for Corporate Transportation Group, Ltd., NYC 2 Way International, Ltd., Allstate Private Car & Limousine, Inc., Aristacar & Limousine, Ltd. and TWR Car and Limo, Ltd.

Companies: Corporate Transportation Group, Ltd.; NYC 2 Way International, Ltd.; Allstate Private Car & Limousine, Inc.; Aristacar & Limousine, Ltd.; TWR Car and Limo, Ltd.

Cases: FranchisingDistribution NewYorkNews