Medical Services Driver FLSA Status Decision Overturned

A federal appeals court on Thursday overturned a lower court’s summary judgment and remanded a case over whether medical service drivers were employees — and therefore subject to the labor standards law fair trade – or independent contractors..

The Department of Labor’s Wage and Hour Division determined after an investigation that the drivers of Eden, Prairie, Minnesota, Alpha & Omega USA, which does business as Travelon Transportation, were employees and subject to the FLSA, according to the decision of the 8th US Court of Appeals in Cincinnati in Martin J. Walsh, Secretary of Labor, US Department of Labor c. Alpha & Omega USA Inc., doing business as Tavelon Transportation; Viktor Cernatinskij, an individual.

The DOL sued Travelers and Mr Cernatinskij, its owner, on behalf of 21 drivers who worked for the app-based company, which transports patients to and from medical appointments. The drivers claimed they were employees and that Travelon violated the FLSA by not paying them minimum wage and overtime and by not keeping proper records.

According to Thursday’s decision, Travelon’s customers pay the company for the transportation service and the company distributes the full amount to the drivers. Drivers are responsible for paying Travelon’s weekly expenses, such as shipping costs.

The United States District Court in Minneapolis granted summary judgment in favor of the DOL in the case and was overturned by a unanimous three-judge appeals court panel.

The district court “resolved the case by granting summary judgment to the secretary, thereby indicating that there were no material factual disputes. We disagree,” the panel said.

The appeals court ruling said that in determining that the drivers were employees of Travelon, the district court applied the six factors of the DOL’s “economic reality” test: the degree of control exercised by the presumed employer; the relative investments of the alleged employer and employee; the extent to which the employee’s opportunities for profit and loss are determined by the employer; the skill and initiative required to perform the work; the permanence of the relationship; and the extent to which the employee’s duties form an integral part of the employer’s business.

“Travelon provided evidence from which a rational factor of fact could conclude that the factors of ‘control’, ‘profit and loss’ and ‘integral to the business’ weigh in favor of drivers being independent contractors,” the decision reads.

For example, on the question of control, “there is competing evidence as to whether drivers could reject travel assignments,” according to the decision. The owner also testified that “drivers could set their own schedule and could change their schedule daily.”

“In sum, the granting of summary judgment was premature,” the ruling said. “While the Secretary showed evidence supporting an employment relationship between Travelon and its drivers, Travelon also showed evidence of an independent contractor relationship.

“These competing narratives must be resolved before the district court issues its legal finding as to the existence of an employment relationship between Travelon and its drivers,” the ruling said, reversing the lower court and returning the case. case for further proceedings.

The DOL did not comment, while the company’s attorney did not respond to a request for comment.