July 14, 2023

DOL seeks misclassified Arizona delivery drivers who are owed millions


The U.S. Department of Labor (DOL) said this week it is still seeking nearly 1,400 Arizona drivers who are owed up to $5.6 million after a victory in a misclassification case that was settled in November.

Parts Authority Arizona LLC and Arizona Logistics Inc., which was operating as Diligent Delivery Systems, were ordered by a federal court to pay $2.8 million in back wages and $2.8 million in damages to 1,398 drivers who worked for the companies from 2012 to 2020.

“We want to make sure that Parts Authority Arizona and Arizona Logistics workers receive all the wages and damages owed to them,” Eric Murray, the DOL’s Phoenix district director of wage and hour services, said in a news release. “Workers may be difficult to locate when they change addresses or phone numbers, and they may not be aware they are owed back pay.”

A November judgment requires Parts Authority Arizona and Arizona Logistics to pay drivers whom the employers misclassified as independent contractors.

Court documents said Diligent Delivery Systems required drivers to sign owner-operator agreements and other documents “purporting to classify driver employees as independent contractors.”

A DOL investigation also found that the companies violated drivers’ rights under the Fair Labor Standards Act (FLSA) by failing to meet minimum wage requirements, pay straight-time rates for all hours worked, pay time and a half for hours over 40 in a workweek and keep required timekeeping records.

Investigators said the companies also required employees to use their personal vehicles for deliveries but did not pay them for doing so.

Back pay owed to some drivers is as high as $120,000, according to court filings. Payments to misclassified drivers have already begun and will be completed in October 2025.

Diligent Delivery, which has 46 locations nationwide, services the health care, retail and e-commerce industries and provides shipping and logistics services on behalf of Parts Authority to automotive dealerships, distributors and wholesalers. The company also provides hotshot delivery express services and operates a long-haul trucking division.

Parts Authority, which has Arizona offices in Tempe, Phoenix, Mesa and Surprise, is a national distributor of automotive replacement parts, tools, equipment and transmissions, with more than 200 U.S. locations.

As part of the judgment, Diligent Delivery Systems CEO and owner Larry Browne was also ordered to pay $150,000 in penalties.

The Department of Labor asks current and former workers of Parts Authority Arizona LLC and Arizona Logistics Inc. to call (877) 465-4898.

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