Finding that a cargo transportation employer had improperly classified its truck drivers as contractors rather than employees, a California court of appeal held in Garcia v. Seacon Logix, Inc. that Seacon was not legally permitted to deduct truck lease and insurance payments from its truck drivers’ compensation.

Seacon owned trucks and leased them to the truck drivers, affixed its logo to the trucks and did not allow the trucks to be taken home or used for personal purposes. Seacon also required drivers to arrive at work by 7:00 a.m. five days a week, assigned deliveries to the drivers, directed them on the proper delivery routes, required drivers to report when deliveries had been completed and disciplined drivers for missing work. Seacon deducted the trucks’ lease and insurance payments from drivers on a weekly basis. Plaintiffs Romero Garcia and other former Seacon truck drivers sued Seacon under California Labor Code § 2802 for reimbursement of their paycheck deductions, contending that they should have been classified as employees and not independent contractors, such that the deductions were unlawful.

Under these circumstances, the trial and appeals court both agreed that the workers were properly classified as employees rather than contractors. The courts determined that Seacon controlled the manner and means of the work and exerted “tremendous control” over the drivers, including by threats of losing their truck delivery routes if the drivers failed to comply with Seacon’s requirements. A judgment was entered and affirmed, which required Seacon to reimburse the drivers for improper deductions of the trucks’ lease and insurance amounts.