Companies and individual managers
on hook for
States are targeting industries
with a history of paying drivers and
delivery laborers as independent
Joint liability for clients and
vendors is a big worry.
Misclassification is expensive. New Jersey charged Uber $649
million for misclassifying workers.
are rushing to replace
independent contractors with
their own employees or with employee-staffed vendors.
have the option of hiring or trading
out with employee-staffed coupon,
door hanger, and TMC delivery
laborers from staffing agencies, and
fund-raising groups are also
Mail distribution is not an
Disclaimer: The purpose of this
article is to increase awareness and
encourage discussion of issues that
may impact the directory industry.
Nothing here should be considered
legal advice or relied upon for
any purpose. Consult with
professional legal and human resource
advisers on all matters.
“We had no idea that the feds and states could hold
us personally liable. Being incorporated,
even declaring bankruptcy might not
"Everybody else was using independent contractors
so we thought it was ok. I never
figured the government would change
the rules just like that. Not just
change the rules now but go back in
time and change the rules, you know,
100,000 directory delivery workers
were invited as potential opt-in
plaintiffs in California and Texas
class action lawsuits. Attorneys
attempted to hold Directory
Distributing Associates (DDA) and
the yellow pages publisher that
hired the delivery vendor jointly liable for
laborers who delivered phone books.
The country's second biggest
directory delivery company ceased
operations and declared bankruptcy
ending its almost 70 year history.
Remaining assets were earmarked for
legal fees and back wages.
Why switching from hand delivery to mail is not an
Yellow page advertisers
competed with other advertisers in
the same phone book. With mailed
phone books, yellow page ads also
have to compete with direct mail ads in
the same mailbox.
"Which ad is gonna
get noticed...the standalone direct mail
post card or the ad in the bottom
quarter of page 200 of the phone
book in the mailbox stuffed with
standalone direct mail pieces?”
yellow pages sales manager.
The yellow pages industry got away with paying
delivery laborers as independent contractors
for decades. What changed? There are a number of
theories. The administrative
overhead of employment is
excessively burdensome for
short-term casual labor so perhaps
the government chose to look the
other way. Some say enforcement
agencies were underfunded as a
result of pro-business politicians
and lobbyists. Reclassifications can
easily bankrupt vendors so
authorities may have been reluctant
to enforce. That has changed.
months, state and local authorities
have started to clamp down hard on
misclassifications. Why? Perhaps it has
something to do with the recent
emphasis on undocumented workers or
Maybe the strong economy and employment levels are
seen as conducive to the disruption
that comes along with enforcement.
Maybe it's the recent, rapid growth
of the app-based gig economy.
Perhaps it is media coverage of Uber
and Lyft or the high-profile protests
What seems clear is that there
is a tsunami of employment-related
court decisions, new laws, and
sweeping the country. Dynamex, ABC, AB5,
PAGA, punitive damages, retroactive
liabilities, even prison time for
the most extreme offenders.
A big concern: growing fears of joint
liability. Publishers that outsource
sales, ad production, or
distribution may find
themselves vulnerable for
the acts and omissions of suppliers. Vendors may cease operations.
Others may refuse to finish contracts.
diligence requires everyone to
measure exposure, make
contingency plans, and take steps to
mitigate liabilities and prevent
operational disruption resulting
from, what many see, as the almost
inevitable reclassification of a
large part of the nation’s work
force from independent contractors
For the directory industry, the biggest
vulnerability may be circulation
since most phone books are delivered
by laborers paid as contractors
rather than as employees.
Said one publisher:
decided to switch to mostly part-time
employees and temps instead of
independent contractors. The
newspaper people deliver [a couple
markets] and we're going to try some
local employee-based delivery
businesses, maybe trade out some ads
with them. Yeah, it's a bit more
hassle than dealing with just one vendor
but we have no choice. Mail is not
We can help.
Using delivery kits or route maps from
DirectoryDistribution.com, anyone can
quickly and easily deliver phone
books. Use the kits to switch from
independent contractors to employee-based
Hire and manage your own
delivery teams or provide route maps
one or more employee-based delivery
companies, temps or staffing
The kits facilitate standardization
and prevent missing or overlapping
deliveries when using multiple crews