LOS ANGELES CITY ATTORNEY MIKE FEUER FILES LAWSUIT AGAINST THREE PORT TRUCKING COMPANIES
Alleges Companies Intentionally Misclassified Hundreds of Truckers As Independent Contractors, Rather Than Employees, to Avoid Providing Benefits And Paying Applicable Taxes
Los Angeles City Attorney Mike Feuer announced that his office has filed lawsuits against three Port of Los Angeles trucking companies alleging each has engaged in a scheme to misclassify truckers working in their employ as “independent contractors” instead of “employees” in order to evade their obligations to provide benefits and pay relevant taxes, and shift operating costs.
“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” said Feuer. “It’s wrong, and we’re fighting to stop it.”
“In late November, the Council’s Trade, Travel and Tourism committee held a special field hearing at the Port of LA to hear firsthand from truckers and warehouse workers about labor abuses, wage theft and poor working conditions at trucking and warehouse companies operating at the nation’s largest shipping Port,” said Councilmember Joe Buscaino. “As chairman, I pledged to do all I could to put an end to the modern day sharecropping that is taking place on public property, and asked our City Attorney to explore all possible legal options. I commend the City Attorney for dedicating the resources of his office to addressing this problem, filing this lawsuit and fighting on behalf of the people of California, who deserve a fair competitive marketplace where no company is allowed to gain an unfair advantage by exploiting human beings for the sake of corporate profits.”
CMI Transportation LLC (CMI), K&R Transportation California LLC (K&R) and Cal Cartage Transportation Express LLC (Cal Cartage), three trucking companies operating in and around the ports of Los Angeles and Long Beach, are each named in three separate lawsuits. The companies rely on fleets of truck drivers to provide short distance transit of cargo between the ports, railyards and warehouses.
The lawsuits allege that the companies purposely classify their drivers as independent contractors rather than employees to avoid obligations to pay employee benefits, such as unemployment insurance, workers’ compensation, minimum wage, and reimbursement for thousands of dollars of business expenses. Allegedly misclassifying drivers also allows each company to avoid paying applicable California taxes, instead shifting this responsibility to the drivers. While these companies increase their profits, drivers may take home as little as a few cents in a work period.
CMI, K&R and Cal Cartage each allegedly exert near complete control over their drivers’ assignments and details of their work – the most significant factor in determining if a worker is an independent contractor or an employee under California law. The companies allegedly make assignments, unilaterally set the rates they pay drivers and retain and exercise the right to terminate drivers without cause.
Each of the companies exert further control over their drivers by allegedly utilizing a leasing scheme for trucks, which pushes their associated costs to the drivers. The terms of the leases allegedly place strict quotas on drivers’ workloads and, in practice, substantially restrict the ability of drivers to take the truck with them if they are terminated or want to pursue other opportunities. Thus, drivers are essentially forced to continue working for these companies or risk losing their significant investment in their trucks.
The lawsuit seeks to enjoin each of the trucking companies from continuing to engage in their current business practices and to adopt measures that immediately remedy violations.
The lawsuit also seeks restitution of any money or property the companies acquired or retained as a result of the alleged business practices, as well as civil penalties of up to $2,500 for each violation.
Assistant City Attorney Michael Bostrom, Deputy City Attorneys Christopher Munsey, Marissa Roy, Saro Balian and Miguel Bahamon are handling the litigation.