News / XPO vows to defend itself 'vigorously' as independently contracted drivers sue over misclassification

XPO Logistics, the fast-expanding trucking and forwarding company, must have come of age: it faces a new lawsuit based on claims which have tripped up other “disruptive” companies, such as Uber.

Three of XPO’s subsidiary trucking companies, Pacer Cartage, Harbor Rail Transport and PDS Transportation, are being sued for the misclassification of drivers as independent contractors. The lawsuit, which is eyeing class action status, claims drivers were denied employee rights such as minimum wages and meal and rest breaks.

Cases such as this are becoming increasingly common in the US, where more than 65% of the 75,000 port truckers are misclassified as independent contractors, according to a 2014 study by the National Employment Law Project, at a cost to the government and drivers of $1.4bn annually, the study notes.

California is the hub of legal activity on this issue: FedEx settled a similar case there last year, for $228m. Uber, meanwhile, saw a judge expand a case against it into a class action last month, after the court found that the driver in question should be classified as an employee.

The case could have far-reaching implications for XPO and its business model, which relies heavily on independent contractors.

But drivers, encouraged by the Teamsters Union, are fighting back. Pacer, whose customers have included Walmart, Toyota and Procter & Gamble, has faced several lawsuits on the same issue, one a class action involving more than 660 drivers. One driver posted his paycheck, for four days ending 12 March 2015, online – after deductions by the company, his total pay was $0.

XPO, however, denies that it treats contractor drivers unfairly.

COO Troy Cooper told The Loadstar in an emailed statement: “We believe this case is without merit and plan to litigate it vigorously. We are in constant dialogue with our independent-contractor carriers and believe the vast majority of them value the significant benefits that operating independently can bring.”

On its website, XPO notes: “When you drive for XPO, we never forget how important you are. We understand the value of loyalty and respect.”

It also claims to have “industry-leading mileage rates and consistent loads”.

Employee review websites such as glassdoor.com show that XPO’s employed drivers consistently note good, above average, pay. Contracted drivers or owner-operators, however, were less satisfied.