California's drayage liability law starts with name-and-shame list of carriers owing claims

( Photo: FW Staff Photographer )

(Photo: FW Staff Photographer)

Law aims to help shippers avoid potential liability; But in an industry with many fly-by-night operators, getting monies owed still a challenge.

California’s new law aimed at highlighting bad operators in port drayage trucking is now in effect. The Department of Industrial Relations (DIR) published its first list of motor carriers that are delinquent on paying court judgements.

The list lets shippers know which carriers have outstanding court judgements, tax assessments or liens.

As of January 1st, shippers and freight forwarders that contract with motor carriers for drayage in California may also be held liable for unpaid wages, unreimbursed expenses or other claims made against the carrier.

The list of port trucking companies with outstanding judgements results from Governor Jerry Brown signing Senate Bill 1402 into law last September. The bill’s main sponsor, State Senator Ricardo Lara, said the law “will clean up our port trucking industry in a way that is fair for absolutely everyone and protect some of our most vulnerable workers.”

The law stems from the many complaints lodged by the state’s drayage drivers over pay and classification as employees or contractors. The DIR has made 448 decisions in favor of drivers with some $50 million in wages owed.

According to DIR, the carriers on the list “refused to pay truck drivers’ wages, overtime or expenses, failed to maintain workers’ compensation insurance, or intentionally misclassified employees as independent contractors to increase profit margins.”

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California Labor Commissioner Julie Su said in a statement, “This new law incentivizes trucking companies to pay up on judgements and put earned wages into drivers’ pockets.”

DIR lists 19 motor carriers as owing $1.6 million in outstanding judgements. The agency has given companies 15 days advance notice of being added to the list. Companies are removed within 15 days of reporting a settlement or providing proof of paying a settlement.

But the ephemeral nature of many of these companies may still make it difficult for drivers and state agencies to collect on any judgements.

Compton-based Pacgran, which is listed as owing $315,000 in judgements, was dissolved according to the California Secretary of State. Houston-based HRT Trucking, which has $193,000 in outstanding claims, was also dissolved.

Still, labor advocates see the new law as improving drivers’ leverage. A Teamsters representative says other motor carriers also have outstanding claims and judgements. But since those carriers have not yet exhausted their final appeals, they do not show up on the list.

Fred Potter, who directs the port division for the International Brotherhood of Teamsters, said the union will make “the customers of lawbreaking trucking companies... well aware of the potential shared liability.”