Statute of limitations kills drivers’ wage lawsuit against moving company
December 14, 2020
New York-based Flat Rate Movers will not have to face a misclassification lawsuit filed by former drivers after a federal court dismissed the case.
On Nov. 30, Judge Alison J. Nathan of the Southern District of New York federal court granted Flat Rate Movers’ motion to dismiss a misclassification lawsuit against the company that was filed in 2017. The court determined the lawsuit was filed beyond the statute of limitations.
Filed by Mirko Djurdjevich, the former driver worked for Flat Rate Movers from 2006 to 2008. Djurdjevich began working for the company as a driver before being promoted to foreman of a truck crew. He was a Form 1099 employee as a driver and W-2 employee after being promoted. Djurdjevich was paid commission for each job he worked. He resigned in 2008, when, he was demoted after an employee he supervised was injured on the job.
According to the complaint, the New York state attorney general fined Flat Rate Movers around $1 million in 2010 for failure to pay overtime wages. That was the same year the company began using independent contractor moving crews, according to court documents.
In fact, Djurdjevich’s company, D&M Corp., entered into a subcontractor agreement with Flat Rate Movers in May 2010. In July 2010, Djurdjevich formed Big M Delivery, obtained worker’s compensation insurance, and entered into another subcontractor agreement with Flat Rate Movers. The lawsuit claimed the moving company required Djurdjevich to create Big M Delivery. Although a subcontractor agreement was signed, Djurdjevich claimSouthern District of New York federal court he was hired as an employee under both contracts.
Flat Rate Movers would receive payments from customers and pay Big M a weekly commission. Big M would then use that commission to pay its workers.
Djurdjevich argued that although his employees were paid by Big M, Flat Rate Movers determined how much his employees were paid for each job.
There was a dispute over who was accountable for truck crew members. Plaintiffs argued they would direct issues to Flat Rate Movers. However, the moving company claimed all issues, including pay, would be directed to Djurdjevich. Plaintiffs also argued they were managed by and reported to Flat Rate Movers, which the company denied.
Big M’s contract with Flat Rate Movers was terminated in October 2011. Subsequently, Djurdjevich filed for unemployment. Drivers for Big M worked for other Flat Rate Movers subcontractors until about early 2015. According to court documents, former drivers do not know exactly how much money they are owed in unpaid wages. They contend that they were underpaid and owed “something,” the court order stated.
Flat Rate Movers motioned to have the case dismiss based on two factors. First, the plaintiffs were never employees of the company but independent contractors. Second, even if they were employees, the statute of limitations for both federal and New York state labor laws prevented the lawsuit from being filed so late.
According to the court order, the Fair Labor Standard Act provides a two-year statute of limitations on actions to enforce its provisions.
With Djurdjevich’s work concluding in 2011, the 2017 complaint was filed well beyond the two-year limitation. Although one of the co-plaintiffs’ work did not end until 2015, that plaintiff did not join the lawsuit until 2019, two years past the statute of limitations.
Plaintiffs in the case attempted to argue equitable tolling, which essentially allows someone to circumvent the statute of limitations if they did not discover the alleged injury until after the limitations time frame expired. In this case, drivers argued that Flat Rate Movers’ classification of independent contractors was an act of deception. However, the court was not persuaded by that argument.
Drivers also argued that their immigration status provided an extraordinary circumstance. Specifically, their immigration status made it less likely that they would look into legal action for workplace wrongdoings. However, the court pointed out “that lack of education, limited financial means, and ignorance of the law are not extraordinary circumstances that justify equitable tolling.”
With the case being dismissed based on statute of limitations, the court declined to address the issues of employee status. The federal court also declined to rule on state labor laws’ statute of limitations since all federal claims were dismissed. LL