NEWS FLASH: Southern California drayage company ordered to pay $6.9m to 38 drivers in misclassification case

Fred Potter, head of the Teamsters port division, predicts the port trucking industry will have to convert from an independent contractor model to one of employee drivers.    The California Labor Commissioner, Department of Labor Standards Enforcement (DLSE) has ordered port drayage company Pacific 9 Transportation to pay 38 truck drivers a combined $6.9 million in wages.
   The Teamster-affiliated group Justice for Truck Drivers said that the commissioner determined those drivers were, in fact, employees, not independent contractors. Drivers were awarded an average of $182,270.50 and one driver was awarded $386,703.14.
   “The landmark ruling marks the first time that the Labor Commissioner has scheduled back-to-back hearings for individual wage theft claims at a single company, and comes as Pac 9 drivers continue their sixth – and indefinite – strike to protest unfair labor practices, including pervasive misclassification at the company, which began on July 21, 2015,” the Teamster group said in a statement.
   “We have finally had our day in court and we are extremely grateful that the government has realized that it isn’t just a handful of drivers that are misclassified – it is all of us,” Daniel Linares, a Pac 9 driver, said of the ruling.
   “We aren’t going to back down now. We will continue suing and striking these companies until they end their unfair treatment and the industry abandons the misclassification scheme that allows these trucking companies to steal our wages and defraud the government.”
   “History has been made and change is on the horizon,” added Fred Potter, international vice president at the Teamsters and director of its port division. “Companies like Shippers Transport Express and Eco Flow Transportation have converted to an employee model and it is no longer ‘if’ but ‘when’ the $12 billion drayage industry will comply with the law.”
   The Labor Commissioner’s office issued its decision following six weeks of back-to-back individual hearings held from July 27 to Sept. 10, 2015. The drivers had filed their claims between June 2013 and July 2014.
   The Teamsters said Pac 9 now has 15 days from the time of service to appeal the decisions, in which case it would be required to post bond in the amount of the award. If it does not appeal, then the decisions become final and enforceable as a judgment in a court of law.
   The DLSE ruled in favor of the drivers on Dec. 14, and on Dec. 18, a California Superior Court judge denied Pac 9’s petition to compel arbitration in the matter.
   The Harbor Trucking Association (HTA), which represents drayage companies in Southern California said, “That Pac 9 had adverse decisions does not mean independent contractor drivers who choose to affiliate with other companies are employees.”
   The HTA lashed out at the Labor Commissioner office, saying it is “consciously or unconsciously, allowing itself to be manipulated by the Teamsters and LAANE” — the advocacy organization known as Los Angeles Alliance for a New Economy.
   HTA complained the Labor Commissioner “is a well intentioned organization which unfortunately has lost touch with the current economy and how technology and entrepreneurial relationships have revolutionized situations like driver and trucking company relations in the direction of independent contractor and small entrepreneur status and away from traditional employee status. Labor Commissioner decisions consistently fail to recognize the dynamics of the changing economy.”
   HTA added it “has serious concerns about the impartiality of the Labor Commissioner decisions for the following reasons: 90 percent to 95 percent of all Commissioner decisions favor the claimant. This suggests a lack of impartiality and ideologically result driven perspective by which everyone must be an employee.
   “In pursuing this agenda of driving independent contractors into employee status, the Labor Commissioner is killing the entrepreneurial opportunity and freedom from control that technology and independent contractor status provides. This means the Labor Commissioner is driving drivers into employee status which means loss of freedom and control over working hours, schedule, whether to work or not, and assets and equity such as a $100,000 truck and lucrative contractual relationships with trucking companies.”