From JDSupra, Richard Reibstein discusses a recent case in which a company that used parking spotholders misclassified workers as independent contractors. Richard writes:
COMPANY ENGAGING PARKING SPOTHOLDERS FOR UTILITY TRUCKS LIABLE FOR $6 MILLION IN IC MISCLASSIFICATION DAMAGES. A federal court in New York concluded after a non-jury trial that a company engaging parking “spotholders,” who locate and “hold” parking spots for trucks used by a large utility company making repairs in New York City, had misclassified those workers as ICs instead of employees under the federal Fair Labor Standards Act (FLSA). In 2019, the U.S. Department of Labor (DOL) investigated the classification of those workers, who would drive to job sites, park, and place traffic cones to keep others from parking near utility structures in need of repair. In its 2021 lawsuit, the DOL asserted that the spotholders had no opportunity for profit or loss; had no special skills; did not use independent initiative; and were supervised by the company’s dispatch office, monitored by “spot checkers,” required to follow company rules, and disciplined for rules violations. In ruling for the DOL, the court assessed the company a total of $6 million: $3 million in back wages for unpaid overtime, and an additional $3 million in liquidated damages. In addition, the court issued an injunction permanently preventing the company from treating the spotholders as ICs in the future. Chavez-DeRemer v. CE Security LLC, No. 1:21-cv-00057 (E.D.N.Y. Mar. 6, 2026).