City Attorney Mike Feuer announced Monday that his office is suing three Port of Los Angeles trucking companies over their practice of classifying truck drivers as independent contractors, in what he alleges is a scheme to bilk them out of fair pay and benefits while also shifting operating costs onto their shoulders.
“This Disgraceful Exploitation, Has To Stop”
The lawsuits filed in Los Angeles Superior Court mirror allegations that many drivers and their unions have been arguing for years, and the issue has been at the center of recent strikes by port truck drivers.
“This abuse, this disgraceful exploitation, has to stop,” Feuer said during a news conference at City Hall East.
LA City Council Tries To Block Companies From Business At The Port
In December, the Los Angeles City Council unanimously voted to explore blocking companies that use truck drivers classified as independent contractors from doing business at the Port of Los Angeles and directed Feuer to take a number of actions, including drafting a report to determine whether the city’s land-use laws can be used to deny access to port property by companies that repeatedly violate state and employment laws in a manner similar to which the city responds to nuisance activities.
Violations Of State Law
But Feuer said the lawsuits were unrelated to the City Council’s action, noting that work on the lawsuits was “well underway” at the time of the council’s vote. The lawsuits are being brought on behalf of the people of the state of California alleging violations of state law, Feuer said, while the City Council’s action directed his office to provide legal advice on what the city could do, and that advice is pending.
Independent Contractor Vs. Employee
Councilman Joe Buscaino, who represents the Port of Los Angeles area, applauded the lawsuits. He heads the Trade, Travel and Tourism Committee, which last year held a special hearing at the port, where truckers and warehouse workers spoke about alleged labor abuses that result from their classification as independent contractors instead of employees. The hearing led to the council’s vote in December to explore banning companies that use the practice from the port.
“Modern-Day Sharecropping… On Public Property”
“As chairman (of the committee), I pledged to do all I could to put an end to the modern-day sharecropping that is taking place on public property, and asked our city attorney to explore all possible legal options,” Buscaino said in a statement. “I commend the city attorney for dedicating the resources of his office to addressing this problem, filing this lawsuit and fighting on behalf of the people of California, who deserve a fair competitive marketplace where no company is allowed to gain an unfair advantage by exploiting human beings for the sake of corporate profits.”
Drivers Mount 15 Strikes In 4 Years
Drivers at the port have complained for years that the independent contractor practice is a scheme to deny them just compensation, and drivers and warehouse workers have engaged in 15 labor strikes in the last four years. The most recent strike was in June and involved several large companies that do transport business at the San Pedro Bay ports.
1,150 Port Truck Drivers File Claims
The port made an effort to address the issue by incorporating an employee mandate into the 2008 Clean Truck Program that would have required companies to hire drivers instead of contracting with them, but it was struck down in a 9th Circuit Court of Appeals ruling.
Since 2010, at least 1,150 port truck drivers have filed claims in civil court or with the California Department of Industrial Relations’ enforcement arm, and judges have sided with drivers in more than 97 percent of the cases heard, ruling that port truckers in California can’t legally be classified as independent contractors, according to the City Council motion.
Three Companies Targeted In Lawsuit
The lawsuits were brought against CMI Transportation LLC, K&R Transportation California LLC and Cal Cartage Transportation Express LLC, which operate in and around the ports of Los Angeles and Long Beach. The three companies are not the only ones that do business at the port with independent contractor drivers, and Feuer declined to explain why they were specifically targeted in the lawsuits, though he did say his office was investigating other companies, as well.
The companies did not immediately respond to a request to comment.
Treating Drivers As Employees
The lawsuits allege that the companies misclassify their workers to avoid obligations to pay employee benefits and avoid paying applicable California taxes, instead shifting that responsibility to the drivers.
The lawsuits also allege that the companies treat their drivers as employees, not independent contractors, in that they exert near complete control over their assignments and details of their work, which is the most significant factor in determining if a worker is an independent contractor or an employee under California law.
Controlling Drivers With Leasing Scheme
The companies also allegedly make assignments, unilaterally set the rates they pay drivers and retain and exercise the right to terminate drivers without cause, according to the lawsuits.
Feuer also alleged that the companies control their drivers by using a leasing scheme for trucks, which pushes their associated costs to the drivers.
Drivers Sometimes Take Home Only A Few Cents
Working as independent contractors results in drivers sometimes taking home as little as a few cents in a work period, the complaints allege.
The lawsuits aim to enjoin each of the trucking companies from continuing to employ their drivers as independent contractors, and also seek restitution of any money or property the companies acquired or retained as a result of the alleged business practices, as well as civil penalties of up to $2,500 for each violation.