Three truck drivers who resided in California performed freight pick-up and delivery services for EGL in California. All three Drivers signed "Leased Equipment and Independent Contractor Services" agreements. The agreements stated that it was the intention of the parties to create a vendor/vendee relationship and acknowledged that Contractors were not considered to be employees of EGL. The agreements also contained a “choice of law” provision stating that Texas law would be controlling in any disputes between the company and the Contractors. Alleging that they were in fact employees, the drivers filed claims under California state law for unpaid overtime wages, business expenses, meal compensation and unlawful deductions from wages. The district court held that the law of Texas applied, and that declarations in the Agreements that the Drivers were independent contractors rather than employees, compelled the holding that they were independent contractors as a matter of law. Thus, the district court granted EGL's motion for summary judgment and the drivers appealed.

1. What issues did the court consider in this case? What was its decision?

2. What factors did the appeals court consider to determine the employment status of the drivers? How do these compare to the economic realities test? Common law test?

3. How did the appeals court apply these factors to the facts of this case?

4. Why had the district court ruled for the employer? Why does the agreement that the drivers signed not matter?

5. Does the business model of this logistics firm, including an emphasis on teamwork, customer service, and real time tracking of parcels, fit with the use of independent contractors? Why or why not?