LA city attorney sues port trucking companies for labor violations

Los Angeles City Atty. Mike Feuer on Monday sued three port trucking companies for allegedly treating their drivers as independent contractors, not employees, and depriving them of wages and benefits. In doing so, Feuer takes sides in a bitter battle that has been raging for a decade at one of the country’s largest port, pitting drivers who say they are being abused against companies who say they should not be forced to employ them.

“Many of these drivers are relegated to poverty even though they work long hours,” Feuer told reporters at a press conference on Monday. “This abuse, this disgraceful exploitation, has to stop.”

The three companies Feuer is suing – Cal Cartage Transportation Express, K&R Transportation and CMI Transportation – collectively maintain a roster of over 400 drivers who are independent contractors, an arrangement common among trucking companies that haul cargo at the ports of Los Angeles and Long Beach. Feuer, however, alleges that the companies have far too much control over their drivers for them to be considered contractors. The companies set pay scales and delivery schedules, handle customer service and assist drivers in purchasing equipment, according to the complaints filed by the city attorney’s office. Under those conditions, Feuer argues the drivers should be employees who receive benefits, equipment, and an hourly wage.

“These drivers deserve to be treated like the employees we allege they are,” he said.

https://twitter.com/CityAttorneyLA/status/950447410194493440

The State of California Labor Commissioner’s Office has tended to agree. While this is the first time the L.A. City Attorney’s office has sued a port trucking company, drivers collectively filed 834 labor complaints against 130 companies between 2011 and 2016, resulting in more than $110 million awarded to drivers, not all of which has been paid out.

Manuel Rios worked for K&R Transportation for 23 years before filing a claim with the Labor Commissioner's Office, alleging he was misclassified as an independent contractor. He said he was excited to hear about the suit against his former company. He recalled struggling to pay for his own health insurance despite working 20-hour days hauling containers from the ports.

“This is what we’re fighting for,” he said in Spanish. But he questioned the limited scope of the city’s lawsuits. “I don’t know why they’re punishing just three when all the companies are the same. They all have the same system no matter what company you go to.”

Feuer said his office was investigating additional companies. He also said the lawsuits would have a broader impact than individual complaints brought to the Labor Commissioner’s Office.

“It’s one thing to address these cases on a person by person basis,” Feuer said.  “We brought these lawsuits against these companies because we’re trying to create systemic change.”

But Weston LaBar disagrees. He heads the Harbor Trucking Assn., which represents trucking companies. LaBar called Feuer’s lawsuits “a witch hunt” to score political points with the Teamsters union, which is actively trying to unionize drivers at the ports and has been the public face of efforts to change their employment classification.

“We’re not opposed to companies using employee drivers,” LaBar said. “But what we are opposed to is this constant onslaught to try to stop drivers and companies from choosing from what makes them feel comfortable. And if a driver wants to be an employee, they should have that right. But if a company wants to contract independently with small business owners, they should have that right, too.”

LaBar said approximately 90 percent of the companies in his association rely on independent contractors. He said most smaller companies use them exclusively because they cannot afford employees. He also said that drivers often prefer to work as independent contractors (also known as owner-operators) because they own their own equipment, set their own schedules, and frequently make more money.

Feuer’s lawsuits, which he said were inspired by reporting in USA Today, are not the city of Los Angeles’ first attempt to influence the working relationship between port trucking companies and drivers. In 2008, the Port of Los Angeles, as part of its Clean Truck Program, prohibited trucking companies from entering the port unless they converted all their independent contractors into employee drivers.

At the time, the Port of L.A. also banned drivers from bringing their old, polluting diesel trucks into the port and required them to buy to newer trucks as part of its effort to clean up air pollution. Many drivers could not afford the $100,000 plus price tag. But as employees, trucking companies with deeper pockets and stronger credit would be forced to buy their equipment for them.

But the American Trucking Association sued the Port of L.A., and in 2011, the U.S. 9th Circuit Court of Appeals sided with the trucking industry. The Clean Trucks Program was allowed to proceed, but without the requirement that all independent contractors become employee drivers.

Instead, trucking companies helped drivers buy their new, clean trucks, drawing up lease-to-own programs that Feuer said have created “additional control over drivers and shackle them to the company.” However, drivers, often with bad credit and little savings, frequently had no other way to buy clean trucks except through the leases. And without clean trucks, they had no way to continue driving at the ports.

In November 2017, the ports passed a new Clean Truck Program that will require all approximately 16,000 trucks operating at the ports to be powered by electricity or other zero-emissions technology by 2035. But unlike last time, the ports are not getting involved with driver-company relations.  

"It’s clear that the ports have limits in what we can regulate," Port of L.A. spokesman Phillip Sanfield told KPCC in July. He would not comment on today's decision.