L.A. city attorney files misclassification suits against three port trucking companies
January 9, 2018
The fight for fair wages for drivers at the ports of Los Angeles and Long Beach rages on as the city attorney announced on Monday lawsuits against three trucking companies that do business at the ports. According to the lawsuits, the trucking companies misclassified truckers as independent contractors to avoid providing benefits and paying certain taxes.
CMI Transportation, K&R Transportation California and Cal Cartage Transportation Express are the trucking companies that were named in separate lawsuits. The three companies were bought by Cherry Hill, N.J.-based NFI Industries last year.
Although specifics vary in each lawsuit, the basic accusations are the same. All three lawsuits lead off with the following:
“In a scheme to increase their profits – by unlawfully evading their obligations to provide benefits, pay relevant taxes, and absorb various operating costs – Defendants have misclassified their drivers as independent contractors, rather than employees. By this action, the People seek to put an end to this illegal and oppressive conduct.”
All three companies are drayage companies that rely on a total of approximately 400 truck drivers to perform duties at the California ports. The lawsuit alleges that the companies have complete control of operations, including locating customers in need of trucking services, negotiating prices, setting delivery times, providing workers, assigning drivers, unilaterally setting the rates it pays drivers, setting policies to retain drivers, and exercising the right to terminate drivers with or without cause.
Additionally, the three trucking companies each have truck leasing programs that give the company more control and “shackle drivers to the company,” according to the complaint.
“Drivers are forced to absorb tens of thousands of dollars of costs appropriately borne by their employer, leaving many in a financially precarious position with limited take home pay,” the lawsuit alleges. “The drivers are also deprived of the protection of workers’ compensation benefits in the event of injury, as well as other benefits to which they are entitled.”
The lawsuit seeks to prohibit the trucking companies from continuing to conduct business as usual and adopt measures that remedy violations. Furthermore, the lawsuits are seeking restitution and civil penalties up to $2,500 for each violation.
“We allege these port trucking companies take advantage of hundreds of hard-working drivers, requiring them to pay onerous expenses just to do their jobs while leaving them without basic benefits and protections, all to boost the companies’ profits,” City Attorney Mike Feuer said in a statement. “It’s wrong, and we’re fighting to stop it.”
Although this is the first lawsuit against the companies from the Los Angeles city attorney, several other actions have taken place over the past couple years. At least 12 decisions issued by the California Labor Commissioner in individual claims determined that drivers were employees. At least 30 more claims are pending. The California Employment Development Department determined that at least four drivers for K&R were employees. Several private class action lawsuits have also been filed and settled.