Universal Tells Workers to Buy Trucks, Become Independent Contractors in Violatin of AB5
Barb MaynardEmail: [email protected] Phone: (323) 351-9321
Kara DenizEmail: [email protected] Phone: (202) 624-6911
(PORTS OF LOS ANGELES/LONG BEACH, Calif.) – In direct and flagrant violation of California's Assembly Bill 5, which unequivocally makes it illegal to misclassify California’s truck drivers as ‘independent contractors,’ multi-billion dollar logistics company Universal Logistics Holdings has fired up to 70 employee port and intermodal drivers in at least three subsidiaries – Universal Intermodal Services, Universal Truckload Services, and Roadrunner Intermodal Services. Drivers report that the company told them that if they buy their own trucks then they can come back to work as independent contractors. Universal’s morally reprehensible action happens just weeks after 28 employee drivers at Universal Intermodal voted overwhelmingly to be represented by Long Beach-based Teamsters Local 848, all of whom have now been fired. It appears they are being replaced by misclassified independent contractors, in flagrant violation of federal labor laws.
Tyler Ross, an employee driver at Universal Truckload, said, “I was let go just like that. It’s heartbreaking. I don’t know how I’m going to pay my rent; times are tough. This is really hard for me.”
Saul Zuniga, an employee driver at Universal Intermodal and new member of Teamsters Local 848, said, “They let us go right after we voted to form our union. It’s Christmas and we had plans. Now we’re not going to have enough money for the rent, let alone Christmas presents for our children. This is incredibly sad for us.”
Willie Davis, an employee driver at Universal’s Roadrunner subsidiary said, “I don’t know how I’m going to make ends meet. It’s Christmas and we’ve been absolutely blindsided. I don’t know why they would just let us go like this a few days before Christmas. It’s cruel.”
Under Section 6 of California’s Assembly Bill 5 (AB5), “No provision of this measure shall permit an employer to reclassify an individual who was an employee on January 1, 2019, to an independent contractor due to this measure’s enactment.”
“Universal Logistics Holdings is the poster child for misclassification in California and across the United States and now they have doubled down on a business model that the State of California has clearly banned,” said Fred Potter, Vice President of the International Brotherhood of Teamsters and Director of the Teamsters Port Division. “Our hearts go out to the drivers that were unlawfully fired just before Christmas and the Teamsters will not stop until this company complies with the law and these drivers – and their families – get justice.”
“The drivers at Universal Intermodal are the newest members of Teamsters Local 848 and we are family. An injury to Universal drivers is an injury to all and we will take strong legal action, hold Universal’s customers like Home Depot, Target, and TJ Maxx accountable, and take the fight to the streets to protect our sisters and brothers,” said Eric Tate, Secretary-Treasurer, Teamsters Local 848.
Contributions to the Port Driver Hardship Fund can be made to Labor Community Services and mailed to:
Los Angeles County Federation of Labor, AFL-CIO
2130 W. James M. Wood Blvd.
Los Angeles, CA 90006
Universal Logistics Holdings (ULH) has nearly $1.5 Billion in operating revenue and has recently purchased several trucking companies around the country, including Roadrunner Intermodal Services and drayage companies operating out of the Ports of Los Angeles and Long Beach. One of these companies, Deco Logistics, which was formerly known as and still does business as Container Connection of Southern California (CCSC), is one of the largest drayage companies at the ports.
Universal’s Container Connection has one of the most extensive records of misclassification-related claims and findings of violations at the ports. Since 2013, CCSC has faced at least six labor and employment-related lawsuits in California Superior Court. In one of these lawsuits, a judge issued a final judgment in 2016 ordering CCSC to pay 11 truck drivers over $2.2 million in damages resulting from their misclassification as independent contractors. One of these lawsuits includes claims for wrongful termination and race discrimination and is still pending. The remaining lawsuits appear to have been settled, and in the cases where there were final judgments, they appear to have been satisfied after years of collections efforts.
The resolution of these cases only addressed past violations; if the underlying misclassification and wage theft continues – which it certainly appears to be continuing – then CCSC would continue to be in violation of employment laws and still open to future such claims.
- CCSC has faced at least 12 wage claims filed by drivers with California's Division of Labor Standards Enforcement (DLSE), also known as the Labor Commissioner's Office.
- Of these, at least eight are known to have resulted in final judgments amounting to $781,754.84 that the courts ordered CCSC to pay, after CCSC failed to pay or appeal the DLSE' s awards in favor of the drivers. CCSC appears to have ultimately paid these final judgments after the Labor Commissioner carried out years of judgment enforcement efforts, culminating in a Stop Work Order.
- Again, by ultimately satisfying those judgments, CCSC only paid what it was determined to have owed for these individual past violations. The payment of the judgments alone did not change the underlying practice that led to the findings.
Misclassification of workers as “independent contractors” is a hot topic with the passage of California’s Assembly Bill 5 (AB 5) and the subsequent push by U.S. corporations like Uber, DoorDash, and XPO Logistics to undermine the law so they can continue to dodge payroll taxes and increase profitability by exploiting their workforce. There are a lot of questions about AB 5, but one thing is crystal clear: Long before AB 5 was introduced in the California Legislature, port and rail drivers have consistently been proven to be employees under the current laws, yet deep-pocketed companies like Universal Logistics have continued to flagrantly break employment, labor, and tax laws by persistently misclassifying their truck drivers.
- Click here for an overview of port trucking misclassification cases
- Click here to read "Rigged," an investigative series on misclassification at America's largest seaport
- Click here for the seminal report "Big Rig Overhaul" on the epidemic of misclassification at America's seaports