The use of independent contractors has been a staple of many companies' staffing models for years. These workplace arrangements are facing renewed scrutiny from government agencies and the courts.¹ Two recent decisions involving the transportation industry highlight the perils of these tenuous classifications, which offer a cautionary tale that extends beyond this particular industry.

Businesses in the transportation industry frequently engage drivers whom they consider to be independent contractors to provide trucking or livery services. By using drivers who own their vehicles and operate their own companies, transportation businesses often lower their capital requirements. Furthermore, independent contractors frequently provide their services at a cost lower than the cost the wages and benefits of an employee work force. Such businesses also avoid the regulatory and litigation burdens that come with coverage of workers under employment statutes.

Transportation businesses also face certain risks from using drivers who are independent contractors. For example, such drivers typically have the ability to work for multiple customers in the same industry, to accept or decline work requests at will and to choose their own hours. Different businesses may come to different conclusions in weighing these risks against the rewards described above.