A federal court in Tennessee has issued a ruling affirming the findings of an investigation conducted by the U.S. Department of Labor (DOL) regarding a Tennessee-based security and traffic control services provider.

The investigation revealed that the company and its owner had misclassified 105 workers as independent contractors. These workers, including some who provided security services in Puerto Rico after Hurricane Maria, were actually employees entitled to minimum wage and overtime protections under the Fair Labor Standards Act.

Asure’s HR experts help business owners comply with federal, state, and local employment laws. Learn how to protect your business here.

A Tennessee-Based Security and Traffic Control Service Provider Misclassified 105 Employees as Independent Contractors

On May 26, 2023, the U.S. District Court for the Middle District of Tennessee issued a supplemental order requiring the. company and its owner to pay an additional $116,273 to the affected employees. This brings the total amount of back wages and liquidated damages owed to $632,463.

The Department of Labor filed a lawsuit against the company after the Wage and Hour Division’s investigation confirmed the misclassification of workers. The court’s ruling highlights the consequences faced by employers who fail to properly classify their workers and deny them the rights and benefits they are entitled to as employees.

Regional Solicitor Tremelle Howard in Atlanta emphasized the significance of this case, stating, “Misclassification strips workers of their rights to overtime and other federal protections and benefits.” The court’s decision serves as a reminder to employers that misclassification is a violation of employment laws and can lead to substantial financial penalties.

During the trial held in July 2022, employees provided testimony that contributed to the court’s decision. The company was ordered to pay $516,190 in back wages and liquidated damages to workers who served in Puerto Rico. Additionally, an additional $116,273 was awarded to a group of guards and traffic control officers employed in the Nashville area.

The Department of Labor, including its regional offices and solicitors, is dedicated to ensuring that employers fulfill their legal obligations to their employees. Litigation is among the available resources used to hold employers accountable and secure the rights and protections of workers.

The company offers various services, including work zone traffic control, business security, personal protection, and private investigation services. Business owners should take note of this case and ensure they properly classify their workers to avoid potential penalties and legal consequences.


It is crucial for small and midsize business owners to understand and comply with employment laws to avoid misclassification issues. Properly classifying workers as employees or independent contractors is essential to ensure they receive the appropriate wages, benefits, and protections. This case serves as a reminder of the severe financial implications that can arise from misclassifying workers and the importance of adhering to federal labor standards.

By following the guidelines set forth by the Department of Labor, businesses can maintain a fair and compliant work environment while protecting their employees’ rights.

Connect with an HR expert at Asure to learn how we keep your business compliant with federal, state, and local employment laws.

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