As we previously reported, the delivery drivers of Sleepy’s LLC commenced a class action lawsuit alleging that the Company misclassified them as independent contractors, thereby denying them certain employee protections and benefits. The lower court ruled that the drivers were independent contractors based on a test called the “economic realities test.” The drivers appealed to the Third Circuit, which in turn, requested certification from the New Jersey Supreme Court on the independent contractor issue. The NJ Supreme Court held that the “ABC Test,” rather than the “economic realities test,” should be used in deciding whether the drivers are employees or independent contractors. As such, the Third Circuit ruled earlier this month that based on the NJ Supreme Court ruling, summary judgment in favor of Sleepy’s could not stand. In its decision, the Court stated that it would vacate the grant of summary judgment in favor of Sleepy’s and remand the case back to the district court for it to apply the appropriate test in determining whether the drivers are employees or independent contractors.
This firm will continue to monitor the developments in this case.