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Siegel & Dolan Wins at the Seventh Circuit on Questions of Employee Misclassification and Denial of Class Certification


Courier services beware. Yesterday afternoon, the Seventh Circuit affirmed summary judgment in favor of plaintiffs and vacated the district court’s denial of class certification in Costello v. BeavEx. BeavEx is a same-day delivery and logistics company that engages couriers to pick up and deliver packages to its clients.  The plaintiffs are a group of couriers working for BeavEx who claimed that they were misclassified as independent contractors, rather than employees. As a result of this misclassification, BeavEx violated the Illinois Wage Payment and Collection Act (“IWPCA”) by making deductions from the couriers’ paychecks without their written consent. In response, BeavEx claimed that it was exempt from the IWPCA and its definition of an “employee” due to a federal statute called the Federal Aviation Administration Authorization Act (“FAAAA”). The district court disagreed with BeavEx, and held that the employees were misclassified. However, the district court also refused to grant class certification to the plaintiffs, which would have allowed them to move forward with their case on behalf of all of BeavEx’s drivers.

The impact of the Seventh Circuit’s decision is this: it once again reinforces the ruling that plaintiffs were improperly classified as independent contractors and has given the plaintiffs the opportunity to pursue the case on a class basis. The Seventh Circuit has also signaled to other courier services that their reliance on the federal statute, FAAAA, is misplaced. Rather, courier services must adhere to the IWPCA’s requirements. Siegel & Dolan attorneys Bradley Manewith and Marc Siegel, along with our co-counsel Lichten & Liss-Riordan, P.C., have worked tirelessly on this matter on behalf of the plaintiffs. We are pleased with the outcome and will post more updates as they develop!

Interested in more legalese? Check out the Seventh Circuit’s full opinion here.