Court awards $254K in back wages, damages after US Department of Labor investigation finds medical transport company misclassified employees

MINNEAPOLIS – Following a five-day jury trial, a federal district court in Minneapolis has awarded $254,628 in back wages and liquidated damages to 21 drivers after the U.S. Department of Labor determined their employer, a non-emergency medical transportation company, misclassified them as independent contractors denying them overtime pay.

Issued on June 27, 2023, the judgment in U.S. District Court for the District of Minnesota is the latest step in the department’s effort to recover wages and damages from Alpha & Omega USA Inc. – doing business as Travelon Transportation ­– and owner Viktor Cernatinskij for the affected employees. The court order follows a June 16, 2023, jury finding that the drivers are not independent contractors but instead employees as they have no profit or loss, were integral to Travelon’s business, and were controlled by the company.

The department filed suit against the Eden Prairie employer after they refused to comply with the findings of an investigation by its Wage and Hour Division that found the company’s misclassification led to minimum, overtime and other violations of the Fair Labor Standards Act.

Specifically, division investigators discovered Travelon violated the FLSA as follows:

• Failed to pay some drivers at all for weeks they drove.
• Made various deductions from the drivers’ wages — for van leasing, insurance, maintenance, dispatch and use of a tablet — which allowed their wages to occasionally fall below the federal minimum wage.
• Failed to pay overtime at time and one-half for hours over 40 in a workweek by misclassifying their employees as independent contractors.
• Did not keep accurate records of hours employees worked.

The jury trial occurred after Travelon appealed the district court’s 2021 judgment awarding back wages and damages. In July 2022, the 8th Circuit Court of Appeals reversed the earlier summary judgment and remanded the case for trial.

“The court upheld that Travel Transportation owes these 21 drivers back wages and damages for failing to pay them as the law requires. With the company setting their work hours, work conditions and pay rates and making demands on their time that prevented them from working elsewhere, the drivers are economically dependent on Travelon Transportation and, by definition, employees and not independent contractors,” explained Wage and Hour Regional Administrator Michael Lazzeri in Chicago.

In addition to paying wages and damages, the court forbid the employers from future Fair Labor Standards Act violations including those found by the department’s Wage and Hour Division.

“The Department of Labor is committed to ensuring workers receive their rightfully earned pay,” said Regional Solicitor Christine Heri in Chicago. “We will use all legal tools necessary to compel employers to abide by the law.”

The department’s Office of the Solicitor in Chicago litigated the case.

Since 1998, Alpha & Omega USA Inc. has operated Travelon to provide transportation services for the older people and those with disabilities, private van service and airport transfer in the Twin Cities metropolitan area.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243).

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Download the agency’s new Timesheet App for Android devices to ensure hours and pay are accurate.