A lawsuit was recently filed against Pathway Leasing, LLC, Matthew Harris, the company's principal owner, and the following alleged joint employers:
• Transforce, Inc.
• XPO Logistics Truckload, Inc.
• Con-Way Truckload Inc.
The suit claims defendants targeted individuals with poor credit and other circumstances that prevented them from purchasing a truck through other means. The suit further alleges that under the guise of offering a “lease” to these purported “independent contractors,” Pathway misclassified individuals, including the plaintiffs, and was able to avoid the expense of acknowledging them as traditional employees.
About Pathway Leasing
To summarize, Pathway Leasing claims to offer value to independent contractors and motor carriers in the trucking industry, provide a practical solution to independent contractors seeking an affordable lease, and deliver business solutions to help independent contractors manage their business and realize the goal of owning their truck.
However, according to 21 plaintiffs named in the lawsuit against Pathway Leasing, the company failed to properly pay wages and was involved in predatory leasing and lending practices.
Plaintiffs claim they were duped into signing lease agreements for trucks with the intention of operating as independent contractors. Once plaintiffs signed their agreements, Pathway exercised near total control over their work-related activities, including who they could drive for, and how and when they could repair or maintain their trucks.
Plaintiffs claim they were also required under their lease to remit their pay to the company for various deductions. Pathway then disbursed payment back to the plaintiffs for far less than the initial amount they were paid. Plaintiffs also claim that despite the myriad deductions, the paychecks never included deductions for any type of payroll withholding required under federal and state law when an employer/employee relationship is formed. Thus, Plaintiffs claim their pay was substantially less than minimum wage, and some plaintiffs were paid what equated to just a few dollars per hour, despite working an average of 70 hours per pay period.
Lawsuit against Pathway Leasing includes Several Counts of Unlawful Actions
Counts, whether statutory or equitable, listed in the lawsuit against Pathway Leasing and other defendants include:
• Failure to Pay Minimum Wage in Violation of the Fair Labor Standards Act (FLSA)
• Rescission or Voiding of Lease Agreements, Warranties and Promissory Notes, and Restitution
• Unjust Enrichment and Restitution
• Quantum Meruit
• Unlawful Retaliation
In their lawsuit, Plaintiffs seek various types of relief from the Court. On February 13, 2017, Plaintiffs submitted a request for a jury trial to the court, as well as:
• payment of all unpaid minimum wages
• payment of an additional equal amount as liquidated damages
• payment of all attorneys' fees and costs
• pre and post-judgment interest at the highest rate allowable under law
• rescission or voiding of their lease agreements, warranty agreements and promissory notes along with restitution
• restitution as defendants have been unjustly enriched
• payment of the value of all benefits conferred upon defendants
• immediate injunctive relief in the form of an Order from the Court prohibiting defendants from engaging in unlawful retaliation as proscribed by the FLSA
• any and all other legal or equitable relief deemed appropriate by the Court
Misclassification a Common Issue for Independent Contractors
According to the United States Department of Labor, misclassification of employees is a serious problem. When an employee is misclassified, it means he or she “… is denied access to critical benefits and protections to which they are entitled, such as the minimum wage, overtime compensation, family and medical leave, unemployment insurance, and safe workplaces.”
The issue not only affects employees in a negative way, but also “… generates substantial losses to the federal government and state governments in the form of lower tax revenues, as well as to state unemployment insurance and workers' compensation funds. It hurts taxpayers and undermines the economy.”