Calif. attorney general files labor suit against SoCal truck firms
California Attorney General Jerry Brown on Friday sued two drayage trucking firms operating in the Southern California ports alleging the firms are misclassifying employee-drivers as independent owner-operators.
Brown claims fleet operator Jose Maria Lira, trucking firm Pac Anchor Transportation and Pac Anchor owner/dispatcher Alfredo Barras unlawfully classified their workers as independent contractors, 'circumventing state employment taxes and labor laws that guarantee workers compensation and disability benefit and the right to a minimum wage.'
According to the suits, Lira leased his trucks to drivers, requiring them to sign a lease agreement stating the driver would pay Lira 50 percent of his or her gross earnings each month in return for use of the truck, plus an additional 10 percent for 'management fees.'
Brown alleges Lira required his drivers 'to claim independent contractor status contrary to their true status as employees.' According to the attorney general's investigation, the drivers worked exclusively for Lira, logging 60 hours or more per week, delivering cargo in Lira company trucks.
'Under these conditions, the drivers should have employee status with its legal protections and benefits under the law,' Brown said.
The second lawsuit filed Friday alleges that Pac Anchor and firm owner/dispatcher Barajas 'engaged in a shell game in which Alfredo Barajas supplied Pac Anchor with 38 trucks and drivers.'
According to Brown's investigation, Pac Anchor directly paid Barajas' truck drivers, providing them with 1099 tax forms at the end of the year.
The attorney general's investigation concluded that the 38 drivers should be classified as employees because they 'do not own the trucks they drive, do not have a business independent of Pac Anchor or Barajas, have no real opportunity for 'profit' other than compensation on a piecework basis delivering loads, and can be terminated at will.'
The suits seek court injunctions to prevent the two firms from classifying their drivers as independent owner-operators as well as civil fines. Brown has asked the court to levy a civil fine against Lira of at least than $50,000. Brown is also asking for nearly $4.2 million in fines against Pac Anchor and Barajas as well as restitution to the drivers of a collective amount at least $1 million for unpaid minimum wages and gains made by the alleged violations.
The International Brotherhood of Teamsters, which has long argued that independent owner-operators are misclassified and should be regarded as employees, praised the filings in a Friday press release.
'By unlawfully labeling the port drivers independent contractors, these trucking companies exploit the system to deny workers and their families their right to benefits and fair compensation,” said Jim Santangelo, Teamsters western region international vice president.
Brown indicated the two suits were the beginning of a 'crackdown' on such illegal labor law violations by trucking firms in the Southern California ports and that more suits would be filed in the coming weeks.