Lara Introduces Legislation to Hold Retailers Accountable for Contracting with Companies that Violate Laws

CA Senator Ricardo Lara Introduces ‘Dignity for Port Drivers’ Legislation to Hold Retailers Accountable for Contracting with Port Trucking  Companies that Violate Labor Laws

Ports of Los Angeles/Long Beach, CA –California State Senator Ricardo Lara (D-Bell Gardens) has amended SB 1402 to eradicate systemic wage theft and labor law violations in California’s port trucking industry that has led to 15 disruptive strikes at America’s largest port complex. The legislation is co-authored by Senator Steven Bradford (D-Gardena) and Assembly Member Lorena Gonzalez-Fletcher (D-San Diego).

SB 1402 will order the California Division of Labor Standards Enforcement (DLSE) to create a list of port trucking companies that have an unsatisfied final court judgment, an assessment from the EDD or any Order, Decision or Award (ODA) from the DLSE for failure to pay wages, imposing unlawful business expenses on employees, failure to remit payroll taxes, failure to provide workers compensation on employees, or misclassification of port drayage driver employees as independent contractors. This list will be available to every shipper who imports and exports goods through California’s seaports – including retailers like Amazon, WalMart, and Home Depot – so that they are unequivocally aware of which companies are violating the law. If in turn the shipper hires a lawbreaking company, then that entity will be held liable for subsequent wage and hour violations for drivers who haul freight for them.

“Until the major retailers like Amazon, Sony, and Home Depot are held jointly liable for the unconscionable and systemic lawbreaking by their harbor trucking contractors, we will not be able to solve the problem of having thousands of immigrant drivers being treated as ‘indentured servants’ by their employers here at the Ports of Los Angeles and Long Beach. With the bold leadership of Senator Ricardo Lara, this will change, paving the way for port trucker jobs to become good jobs,” said Randy Cammack, President, Teamsters Joint Council 42.

“With the introduction of this bill, port drivers like me feel hope that the trucking companies will finally stop cheating us and breaking the law to cut costs. I have gone on strike many times with my fellow drivers to protest our abusive treatment. I have walked picket lines at the entrance of port terminals all day and all night because we no other way to get the rich and powerful corporations like Amazon, Lowes, and Wal Mart to take responsibility for fixing their trucking companies’ exploitative treatment of us. Thank you, Senator Lara, for introducing these important bills that will improve the lives of thousands of port drivers like me.” said Gustavo Villa, a misclassified driver from NFI/California Cartage Express who met personally with Senator Lara in late 2016 to detail the exploitation and abuse drivers suffer at America’s largest port complex. “I am hopeful that Senator Lara’s legislation will help me and my coworkers re-claim our employee rights so that we can stop striking and get back to the business of hauling America’s cargo.”

Overview of Misclassification and Wage Theft Claims (updated 2/15/18)

Labor Commissioner claims

Since 2011, port truck drivers have filed at least 890 claims with the CA Division of Labor Standards Enforcement (DLSE). Of those, the Labor Commissioner’s office has issued determinations in at least 376 cases, finding that drivers were, in fact, employees and therefore owed over $40 million in stolen wages and penalties. There are approximately 150 pending claims awaiting hearings. The remaining approximately 350 cases filed appear to have been settled prior to hearing or were transferred to court or private arbitration.

Private litigation

Drivers have also been exercising their rights as employees through the court system. Drivers at virtually every market-leading company at the ports have joined class-action suits for misclassification and wage theft, with more than 30 such suits filed. Several of these cases have recently settled, although the persistent misclassification leaves these companies vulnerable to new claims. In addition to the class action suits, drivers have also filed dozens of individual or “mass-action” suits involving multiple plaintiffs.

Labor Code violations

All of the above cases – DLSE claims, along with class action, “mass-action,” and individual lawsuits – are seeking to address violations of the California Labor Code, including unlawful deductions and unreimbursed expenses, and failure to provide meal and rest breaks. Recent cases also include damages for unpaid “nonproductive” hours worked, such as time spent inspecting trucks, under a new CA piece rate law (AB 1513). Most of the private suits include other causes of action, including willful misclassification and violations of the CA Unfair Competition Law.

Agency Enforcement and Employee Determinations

In addition to the courts and the DLSE, other state and federal agencies have found port drivers to be employees upon conducting investigations into labor, employment, and tax laws. These decisions include the following:

Federal government action

  • National Labor Relations Board (NLRB): In 2017, an Administrative Law Judge for Region 21 of the NLRB found Intermodal Bridge Transport (IBT) drivers to be misclassified and that this misclassification is a violation of the National Labor Relations Act (NLRA). Additionally, Region 21 of the NLRB has made merit determinations that drivers from at least five other major port trucking companies were employees – not independent contractors.
  • US Department of Labor (DOL): The DOL conducted an investigation of a market-leading port trucking company for misclassification, which resulted in a 2014 consent judgment and order in which the presiding federal judge found the company’s California drivers to be employees and ordered it to reclassify them (Thomas E. Perez, v. Shippers Transport Express, Inc., Case No. 2:13-cv-04255-BRO-PLA).

California state government action

  • CA Employment Development Department: The California Employment Development Department has issued individual employee determinations in the cases of at least 45 port drivers.
  • CA Attorney General: Between 2008 and 2009, the CA Attorney General filed lawsuits against six area port trucking companies, five of which were settled. The sixth suit, against Pac Anchor, is moving forward following a unanimous 2014 ruling by the California Supreme Court that found that that the case was not preempted by federal law. The US Supreme Court declined to review that decision in 2015, clearing the way for the original case to proceed. A trial is scheduled for April 2018 (The People of the State of California v. Pac Anchor, Case No. BC397600).

City government action

  • Los Angeles City Attorney: On January 8, 2018, the Los Angeles City Attorney filed lawsuits against three port trucking companies owned by NFI/Cal Cartage, whose trucking enterprise is the largest at the Ports of LA and Long Beach, for violating the Unfair Competition Law (UCL) by misclassifying port truck drivers as independent contractors, evading their obligation to provide benefits to drivers and pay relevant taxes (The People of the State of California v. CMI Transportation, Case No. BC689321; The People of the State of California v. K&R Transportation, Case No. BC689322; The People of the State of California v. California Cartage Express, Case No. BC689320)