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Illinois Trucking Companies Need To Beware: Owner Operators Challenging Their Employment Status And Deductions From Their Settlements Under The IWPCA!

A recent wave of litigation under the Illinois Wage Payment and Collection Act ("IWPCA") is threatening the entire trucking industry in the State of Illinois, by challenging owner operators' employment status, and then, the deductions from their settlements. This is forcing trucking companies to scrutinize their owner operator agreements to assure they are protected from any liability.

Typically, owner operators are covered under the Department of Transportation ("DOT") rules and regulations, since they travel across the United States picking up and dropping off different loads from different companies. Because of the interstate travel, trucking companies have always relied on those DOT rules and regulations, when creating their owner operator relationships. Those DOT rules and regulations allow companies to take certain deductions from owner operators' settlements and other specific rules aimed at owner operators. But a recent wave of litigation is attempting to change those owner operator relationships and then challenge those DOT deductions by claiming they are illegal under the IWPCA. But trucking companies can protect themselves through their owner operator agreements, if addressed at the beginning.

As mentioned, some owner operators are attempting to use the IWPCA to reclassify the owner operators as employees, and then claim that the DOT deductions violate the IWPCA. Companies can defend themselves by arguing that those owner operators are not "employees" under the IWPCA. The IWPCA covers "employees and employers in this State" and since the owner operators travel a majority of their time across the country, it seems fairly obvious that the owner operators are not "employees...in this State." It sounds simple enough, but the issue is just starting to pop up in Illinois courts and the Illinois Supreme Court has not ruled on the issue.

Now whether or not the owner operators are covered under the IWPCA is a matter of interpretation, specifically, who is considered an "employee ... in this State." Even though the Illinois Supreme Court has not ruled on this issue, Illinois lower courts don't need to look very far, as the Seventh Circuit Court of Appeals has already provided guidance on the interpretation of that specific language.

The Seventh Circuit has essentially held that "employees ... in this State" means that the individual must work a substantial amount of time in the State of Illinois, in order to be considered an employee under the IWPCA. This interpretation also allows for non-residents, who work solely in the State of Illinois, to be covered by the IWPCA, since they are working a substantial amount of their work in the State of Illinois. The Seventh Circuit's interpretation also allows the trucking industry to continue to follow the DOT rules and regulations and not allow State laws to interfere with interstate travel.

Now this isn't to say that an individual who drives solely in the State of Illinois would be governed by the IWPCA - this article addresses the fact that owner operators who travel across the country, from State-to-State, should not be considered "employees" in the State of Illinois.

Sean Darke, Esq. is a shareholder at Wessels Sherman Joerg Liszka Laverty Seneczko, P.C. a management-side labor and employment law firm in Chicago, Illinois. Mr. Darke successfully defends Businesses in all areas of Employment and Labor laws under both State and Federal laws. Mr. Darke can be contacted at 312-629-9300 or at sedarke@wesselssherman.com

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