* Here we go again.
A group of drivers filed a lawsuit against Cardinal Logistics Management Corp. alleging that Cardinal misclassified drivers as independent contractors.
The drivers allege that they were employees, as opposed to independent contractors, and the misclassification allowed Cardinal to be relieved of the obligation to reimburse the drivers for any and all employment claims. The drivers also contend that Cardinal avoided giving them required meal and rest breaks, avoided keeping itemized wage statements and paying for workers’ compensation insurance.
The parties have reached a settlement which would require Cardinal to pay $3.75 million to create a settlement fund.
Cardinal Logistics Management Corp. was owned at the time by… you guessed it, GTCR Golder, Rauner...
“We are extremely pleased with Cardinal’s performance in growing the business profitably and we think the market for outsourced, specialized, high-intensity local fleet operations will continue to enjoy significant growth.
“Cardinal’s innovative capabilities and national infrastructure are ideally suited to create value for its clients in that arena,” said Dave Donnini, member of Cardinal’s Board of Directors and Principal of GTCR Golder Rauner LLC.
* From 2007, when the lawsuit was originally filed…
[Plaintiffs attorney] Jennifer Whipple characterizes the case as “one of the most blatant cases of deliberate misclassification” she’s ever seen. […]
The lawsuit claims that Cardinal directs and controls the work its delivery drivers perform, but has established an elaborate system and a series of documents to disguise the employer-employee relationship. For example, Cardinal requires the drivers to agree to provide their own equipment to perform deliveries, but also requires them to lease the trucks from the company and cover all costs, such as fuel and maintenance, the suit says. It also charges that as a condition of employment, the drivers are required to establish their own corporations or limited liability companies, which “serve no purpose other that to perpetuate and shield Cardinal’s scheme.”
The complaint stems from the specific case of Gerald Smith of Reno, Nev., represented by Whipple, who worked as a delivery driver for Cardinal, driving a Home Depot-labeled truck and wearing a uniform with both Home Depot and Cardinal logos from May 2004 to November 2006.
Smith worked eight to 10 hours a day, six days a week, receiving a weekly paycheck from Cardinal after the company deducted a substantial proportion of his earnings for expenses, calculated entirely by Cardinal, the suit said. All of his work was done at the company’s direction.
“This company ignores its legal responsibilities to its workers and is maximizing profits at the expense of its workers,” Whipple said. “It is illegal and grossly unfair, and we look forward to getting some justice for these drivers.”
* From 2012…
After a 15-year holding period, GTCR has sold Cardinal Logistics Management Inc ., a third-party transportation logistics provider with $325 million in revenue, to Centrebridge Partners, according to Jerry Bowman , president of Cardinal Logistics.
Terms of the deal weren’t disclosed..
Hat tip: William Kelly, who is a vehement Rauner hater. Still, those links don’t lie.
* By the way, GTCR bought Cardinal in 1997 and both were promptly sued by JB Hunt, which alleged Cardinal was trying to steal its employees and clients and attempting “blackmail.”