Interstate motor carriers that hire over-the-road drivers or contract with owner-operators should note a recent decision from the United States District Court in Chicago. In Prokhorov v. IIK Transp., Inc., No. 20 CV 6807, 2024 WL 3694523 at *7 (N.D. Ill. 2024), the Court held that the Illinois Wage Payment and Collection Act (IWPCA) applies to an interstate driver so long as the driver performs some amount of work in Illinois. The IWPCA:

1. Prohibits employers from making deductions from employee wages unless certain requirements are met, and
2. Obligates employers to reimburse certain business expenses.

Although the defendant in Prokhorov presented evidence that some members of a certified class of owner-operators drove as little as 4% of their miles in Illinois, the Court found the IWPCA applied to all class members because they all performed at least some work in Illinois.

The Court also granted summary judgment to the class on the issue of employment, concluding the defendants failed to demonstrate the owner-operators were independent contractors under the ABC test. The Court only addressed the B-prong—whether the defendants demonstrated the owner-operators performed work outside the usual “course” or “places of” the defendants’ business. The Court held the “class members were truck drivers who performed work in [defendants’] usual course of business (freight delivery), and they did not perform work outside of [defendants’] place of business (which includes delivery routes).”

After concluding the owner-operators were employees under the IWPCA, the Court addressed the parties’ arguments concerning whether the defendants violated the IWPCA by making deductions from the owner-operators’ “wages” without securing “express written consent” as required by the statute. Specifically, the relevant regulations authorize employers to make deductions from wages when

1. Written consent is “given freely at the time the deduction is made” or
2. A written agreement specifies the amount and duration of a recurring deduction and provides an option for withdrawal.

The Court found that the defendants made unauthorized deductions from the owner-operators’ wages because they did not obtain written consent at the time of each deduction (e.g., defendants deducted costs for damages caused by frozen brake pads without obtaining a separate authorization at the time those deductions were made). Further, while the Court acknowledged the independent contractor agreement generally described certain settlement deductions, the Court deemed the language in the agreement insufficient to satisfy the regulatory requirements because it provided “no notice about the duration of the deductions, the amount of the deductions, or an option for voluntary withdrawal.”

The Court’s conclusion on deductions from escrow accounts was a silver lining for motor carriers. The IWPCA deduction provisions only apply to deductions from wages. The Court distinguished deductions from escrow accounts (which, in the Court’s view, would not be subject to the IWPCA) from deductions from wages. However, the Court ultimately determined there were questions of fact concerning whether defendants made deductions from wages or from escrow accounts.

Lastly, the Court addressed the plaintiffs’ claims that they were not reimbursed for “job-related” expenses in violation of the IWPCA. The Court acknowledged the IWPCA indeed requires employers to reimburse employees for certain expenses when employees “submit expenses for reimbursement with documentation within 30 calendar days.” Because no evidence showed the class members submitted requests for expense reimbursements, the Court granted summary judgment to the defendants on this issue.

Although a decision by a federal district court concerning the application of Illinois law is not binding on other courts, the plaintiffs’ bar will point to this opinion as persuasive authority. And we anticipate that this decision may prompt a slew of claims against interstate motor carriers that operate in Illinois.

If your company operates in Illinois and needs advice regarding how this opinion may impact its operations or is interested in adjusting its practices to reduce the likelihood of drawing liability for similar claims, please contact Scopelitis Attorneys Greg Feary, Andy Butcher, Kelli Block, Chip Andrewscavage, and Matthew Payne.