Make Sure You Have Properly Drafted Owner Operator Agreements

A properly drafted Owner Operator Agreement can literally save your business.  In Performance Team Freight Systems, Inc. v. Aleman, the California Court of Appeal enforced an arbitration clause included in an Owner Operator Independent Contractor Agreement required by a trucking company that served the ports of Long Beach and Los Angeles.

The plaintiff truck drivers all signed these agreements clearly characterizing them as independent contractors.  The drivers then filed wage claims with the California Labor Commission claiming they should have been treated as employees.  The Labor Commission set the wage claims for dreaded “Berman Hearings” where drivers have consistently prevailed garnering large awards. Before commencement of the Berman Hearings, the trucking company filed an action in Superior Court requesting an order requiring that the drivers arbitrate their claims outside of the Labor Commission.  The appellate court reviewed the law and the driver agreements and issued the order requiring that the wage claims be arbitrated.

Make sure you have a properly drafted owner operator agreement if you utilize independent contractor drivers.  Such agreements must comply with federal law, include a well drafted arbitration provision, and be updated on a regular basis.

If you have any questions regarding wage claims and other employment issues , please do not hesitate to contact us.

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