Albillo v. Intermodal Container Services, Inc., 114 Cal. App. 4th 190 (2003)

In this class action, the plaintiff-independent contractors (truck owners and owner-operators) sued Intermodal Container Services, Inc. and other freight transportation companies (the companies) for violation of Business & Professions Code § 17200, among other things, arising out of the companies’ charging the truckers for workers’ compensation coverage. Under the lease agreement between the truckers and the companies, the truckers were required to maintain workers’ compensation coverage but were given the option of obtaining such coverage from the companies under their group policy. The truckers alleged that the companies’ practice of deducting and receiving funds from the truckers to cover the cost of workers’ compensation insurance violated Labor Code § 3751, which prohibits employers from receiving from employees any contribution to cover the whole or any part of the cost of workers’ compensation insurance. Although the trial court (a panel of retired judges) held that the companies had not violated Section 3751 because there was no employer-employee relationship, the Court of Appeal reversed the judgment, holding that the Labor Code restriction applied nonetheless since the parties had elected to come within the provisions of the workers’ compensation law. Accordingly, the Court of Appeal remanded the matter to the trial court to determine whether the companies were liable to the truckers under the Business & Professions Code and, if so, to determine the appropriate remedy.