On September 12, 2005, three freight pickup and delivery drivers, who worked for EGL, Inc., filed this class action lawsuit under the California Labor Code and the California Unfair Competition Law against EGL in the Santa Clara Superior Court of California. On October 14, 2005, the case was removed to the U.S. District Court Northern District of California, San Jose on grounds of diversity jurisdiction.
The Plaintiffs, represented by private counsel, asked the court for damages and declaratory relief, claiming that EGL denied them certain employee benefits required under the California Labor Code by misclassifying them as independent contractors instead of employees. Specifically, the Plaintiff's alleged that EGL violated the California Unfair Competition Law (Cal. Business and Profession Code §17200-09) by misclassifying the Plaintiffs as independent contractors and thereby violating state laws requiring employers to pay overtime compensation (Cal. Lab. Code §§ 510 & 1194) and minimum wages (Cal. Lab. Code §1182.11 & 1182.12), prohibiting employers from making certain improper deductions from wages (Cal. Lab. Code § 221), requiring employers to reimburse employees for necessary business expenses (Cal. Lab. Code § 2802), requiring employers to provide accurate itemized wage statements to employees (Cal. Lab. Code §1174 & 1174.5), requiring employers to pay all compensation to employers that are discharged (Cal. Lab. Code §201, 202, & 203), and requiring employers to provide off-duty meal periods (Cal. Lab. Code §§ 226.7 & 512).
EGL, Inc. is a global transportation, supply chain management and information services company incorporated under the laws of Texas and headquartered in California. One aspect of EGL's business is domestic delivery services. The plaintiffs were California residents who provided freight pick-up and delivery services for EGL in California. All three Plaintiffs signed agreements with EGL that expressly characterized the Plaintiffs as independent contractors and included a choice of law clause specifying Texas law as governing the agreement.
On December 8, 2006, EGL moved for summary judgment arguing that the plaintiffs were independent contractors under the terms of the agreement, and therefore not entitled to employee benefits provided by the California Labor Code. The Plaintiffs argued that their claims fell outside the scope of the choice of law provision and that the application of Texas law is contrary to California law. U.S. District Court Judge Ronald M. Whyte granted summary judgment for the defendant. Narayan v. EGL, Inc., No. C 05 04181, 2007 WL 2021809 (N.D.Cal. July 10, 2007).
On July 13, 2010, the Ninth Circuit Court of Appeals, in an opinion by Judge Edward R. Korman, reversed the District Court's order granting summary judgment. Narayan v. EGL, Inc., 616 F.3d 895 (9th Cir. 2010). The court reviewed the District Court's choice of law decision de novo, and held that Texas law applied only to the interpretation and enforcement of the contract itself. Id. at 899. Therefore, California law applied because the plaintiffs claimed benefits under the California Labor Code. Furthermore, the Court held that summary judgment was not appropriate under California's multi-faceted test of employment, because a reasonable jury could find the existence of an employee relationship between the Plaintiffs and EGL. Id. at 904.
As a result of the 9th Circuit's reversal, the case was again before the District Court. As the parties discussed how to proceed with discovery and/or to settle the case, the plaintiffs filed a second amended complaint on February 7, 2011, adding a cause of action for failure to pay minimum wage. Then on September 23, 2011, the plaintiffs filed a Motion for Class Certification. Seven days later in a joint report on Alternative Dispute Resolution (ADR), the parties discussed their failed attempts to reach a settlement. The plaintiffs wanted any settlement to be class-wide, and rejected the defendant's proposal to discuss settlement with only the named plaintiffs and other interested individuals. As such, though the plaintiffs believed mediation would be helpful in reaching a settlement, the defendants expressed doubt that mediation or any other form of ADR would be be beneficial unless the plaintiffs were willing to drop the class action.
Over the next year, the plaintiffs submitted exhibits and declarations in support of their motion for class certification, while the defendants submitted exhibits and declarations supporting their opposition to the motion for class certification. The parties also deposed most of these declarants. A motion hearing held on March 30, 2012 before Judge Whyte. However, despite the plaintiffs calling the Court's attention to a recent decision, Scovil v. FedEx Ground Package System, Inc.
, 2012 WL 3308831 (D.Me.)., their Motion for Class Action was denied on September 7, 2012. 285 F.R.D. 473. The plaintiffs filed for permission to appeal that decision, but their petition for permission to appeal was denied on December 17, 2012.
On August 11, 2014, M&G Truck Service filed a notice of lein against one of the named defendants, claiming that he owed $27,606.54. After the parties in that matter came to a settled agreement, a release of lien was filed on October 13, 2015. That matter is closed.
On December 3, 2015, the parties in this matter settled, agreeing to dismissal of the claims by three of the named plaintiffs, with prejudice. Each side was to bear its own costs of the suit except otherwise provided for in the parties' settlement agreement, and the settlement agreement is not available. This stipulation did not affect the claims by the fourth named plaintiff, who, pending resolution of his proposed bankruptcy resolution, maintained all of his causes of action in this case. This stipulation was granted on December 4, 2015.
In February 2016, the parties filed a stipulation with proposed order to dismiss all of the claims by the remaining named plaintiff, with prejudice, against the defendants. This settlement agreement is likewise unavailable. The stipulation was granted on February 25, 2016 by Judge White. This case is closed.Joe Reiter - 03/29/2011
Saeeda Joseph-Charles - 02/24/2017