Los Angeles – Striking drivers from Intermodal Bridge Transport (IBT), Pacer Cartage (NYSE: XPO), and Harbor Rail Transport (HRT) (NYSE: XPO) returned to work this morning after a four day strike that drastically impacted company operations and left containers bound for the companies’ customers – including Walmart, Costco, Toyota, General Electric, Target, Procter and Gamble, and JC Penney – languishing on the docks at the Ports of Los Angeles and Long Beach as nearly all marine terminals turned away trucks from struck companies. Ambulatory picket lines at one Port of Long Beach-based marine terminal that was accepting trucks from struck companies, Cosco – the parent company of IBT – created massive back ups. Drivers from Pacific 9 Transportation (Pac 9), who are on strike for the fourth time in less than two years remain on strike and picketing is continuing at the company yard at 2045 E. Carson St., Carson, CA.
Notably, IBT drivers began their strike on Monday, April 27, with just a handful of drivers protesting the company’s illegal business model and unfair treatment against drivers fighting for justice. The number of drivers on strike at IBT swelled throughout the week as a majority of drivers joined those brave enough to start the strike alone on Monday.
“I am very proud of what we have accomplished,” said Hector Flores, a misclassified “independent contractor” at IBT and married father of two beautiful daughters. “For too long, we have been treated like the orphans of the port, disrespected by the boss and voiceless at work. Now we have earned the respect of the marine terminal operators and the world. We won’t back down until the boss respects us as well.”
“The drivers and the Teamsters consider this week’s unfair labor practice strike to be completely successful,” said Fred Potter, Director, Teamsters Port Division and International Vice President. “The struggle for justice at the Southern California ports has made international news and was discussed in Congress this week. It is unfortunate that the ports must suffer delays because unscrupulous companies continue to violate the law and misclassify their drivers. However, we are beginning to see change in the industry as a number of some of the largest drayage firms have come to the table with the Teamsters to address the issue of misclassification and rights for workers. During the strike, we had an opportunity to talk to thousands of drivers on the long lines at marine terminals who are eager to join the struggle, and unless companies respect the law and properly classify their drivers, more and larger strikes are to be expected.”
Port truck drivers in Los Angeles and Long Beach are challenging illegal misclassification and organizing to improve their lives. In addition to disruptive work stoppages, port drivers are engaging in the large-scale, collective use of legal remedies to secure their rights as employees. They are petitioning federal, state, and local agencies to remedy their misclassification, and filing numerous private wage and hour lawsuits. Our data shows that every federal and state governmental agency that has conducted investigations on the matter has consistently determined that port drivers have an employee relationship with the trucking companies for which they work. The National Employment Law Project (NELP) estimates that port trucking companies in California are annually liable for wage and hour violations of between $780 million and $998 million each year. (See below for a summary of litigation and regulatory action for the four companies on strike this week.)
Due to drivers’ collective legal actions, breaking the law for profit has become very expensive for port trucking companies. As the consequences for illegal misclassification become increasingly clear, drayage companies seem to be taking two paths: either they embrace the employee model—putting an end to the misclassification that drivers have been subjected to—or they continue to break the law and go bankrupt rather than comply with labor and employment laws. One such company, QTS Inc., where drivers were on strike in November 2014, declared bankruptcy under the weight of $6 million in wage and hour claims; the company liquidated and is no longer in business.
ABOUT THE COMPANIES
Pacific 9 Transportation (Pac 9)
Pacific 9 Transportation (Pac 9) is one of the top ten port trucking company serving the Ports of Los Angeles and Long Beach and is owned by Chris Vu Hong, Le Gia Phan, and Alan Ta. Pac 9’s key customers include Walmart, Forever 21, Louis Vuitton, CVS, Macy’s, and Family Dollar. The following summaries regulatory action and litigation related specifically to Pac 9:
- In December 2014, the DLSE determined that four Pac 9 drivers were misclassified and ordered Pac 9 to pay a total of $ 254,627.12 in back wages and penalties.
- The total estimated liability the company would face for all 43 remaining claims is over $6.25 million. If every driver at the company were to file a claim, the company would face an additional liability of at least $12 million. In addition, Pac 9 is facing two class actions lawsuits for alleged wage theft and illegal misclassification of its drivers.
- A regional office of the National Labor Relations Board (NLRB) has made a merit determination that Pac 9 misclassified its workers as “independent contractors” and they were, in fact, employees. The NLRB Regional Office began its investigation in November 2013, when drivers filed an unfair labor practices (ULP) charge with the NLRB, alleging that Pacific 9 had restrained, coerced, and retaliated against union supporters.
- Though this ULP was originally settled on March 19, 2014, the company soon after violated the terms of the settlement. As part of the settlement, Pac 9 was required to post a notice stating the workers’ right to form a union. Soon after the posting, Pac 9 management sent its drivers a memo telling them that the notice didn’t apply to them because they weren’t employees.
- As a result, the NLRB has revoked the settlement and issued a new complaint against Pac 9 for the original charges. A hearing is set for May 11, 2015.
- Another government agency, the California Employment Development Department (EDD), has also determined that Pac 9 misclassified its employees and failed to pay unemployment and state disability taxes for its truck driver workforce, as is required by law. Pac 9 has appealed the agency’s decision. The California EDD has also concluded that several individual Pac 9 drivers are employees in making benefit determinations.
- Pac 9 drivers have gone on strike four times over the past year and a half to protest unfair labor practices. Despite the multiple agency determinations that its drivers are employees, the company has refused to address the underlying condition of misclassification. Instead, company management has shifted even more burdensome costs onto its drivers, many of whom have faced weeks of negative paychecks after management deducted costly repairs for Pac 9’s trucks from their weekly pay.
XPO Logistics, operating through subsidiaries Pacer Cartage (“Pacer”) and Harbor Rail Transport (“HRT”), is among the top five trucking companies servicing the Ports of LA and Long Beach as well as intermodal rail yards in the area. HRT is the company within the XPO Logistics group that specializes in moving goods to and from the ports, while Pacer Cartage specializes in moving goods to the rail yards. There are about 280 misclassified drivers working in both companies in their LA area locations and 90 additional drivers in Pacer Cartage’s San Diego location. Pacers key customers include Procter and Gamble, Walmart, Toyota, and Costco.
XPO Logistics’ subsidiaries are facing several legal actions related to misclassification that create great liability for the company:
- In March 2014, the California Division of Labor Standards Enforcement (DLSE) issued findings in the wage claims of seven individual drivers from Pacer San Diego, all of whom it found to be employees who had been illegally misclassified as independent contractors. The DLSE awarded these drivers a combined $2.2 million. Pacer appealed these seven awards to the California Superior Court, San Diego and the court has filed a tentative ruling upholding the DLSE’s decision.
- Pacer Cartage is also facing a class action lawsuit due to the company’s alleged willful misclassification of employees. This lawsuit involves about 662 drivers and the estimated liability amounts to over $5 million.
- Additionally, three misclassification lawsuits that name 150 drivers as plaintiffs have been filed against XPO Logistics’ companies. All of these cases remain pending.
Intermodal Bridge Transport, Inc.
Intermodal Bridge Transport (IBT), a subsidiary of COSCO Group, which is owned by the Chinese Government, specializes in the movement of containers and trailers from major ports and inland railroad hubs to customers. The company began its operations in Wilmington, CA, and now it has expanded nationally, including to New Jersey and Savannah. In the port of LA, IBT is among the top 20 companies, and the company seems to be growing. There are about 105 misclassified drivers working at IBT in its Wilmington location. IBT’s Customers include Toyota, General Electric, Target, and JC Penney.
IBT is facing several legal actions related to misclassification that create great liability for the company; all of these cases remain pending:
- IBT has been named the defendant in two class action lawsuits due to the company’s alleged willful misclassification of employees.
- Additionally, one misclassification lawsuit that names 16 drivers as plaintiffs have been filed against IBT.
Social Media Links
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