Dateline: Los Angeles/Long Beach
June 17, 2013
by Jon Zerolnick
Last Thursday the U.S. Supreme Court ruled in a case that had the potential to impact millions of people in Southern California – people who have been breathing cleaner air thanks to the Port of L.A.’s Clean Truck Program. The Clean Truck Program is an innovative policy that has been successful in reducing port-related truck emissions by as much as 90 percent. But it has enemies, most notably the trucking companies who profited from the dirty, unregulated system as they worked on behalf of Walmart, Target, and every other big importer.
The national trucking lobby, on behalf of these firms, sought to kill the program by challenging it in court. As we passed environmental and public health milestone after milestone, the trucking industry filed legal motion after legal motion, and the case bounced between all levels of courts. But Thursday was the big one—the highest court in the land finally weighed in on the legality of the program overall. This ruling would be the culmination of almost five years of litigation filed by the industry (not the truck drivers), litigation that was filed even before the Clean Truck Program went into effect in 2008. And while many of us had been waiting for this ruling for a long time, when it finally came down, it was, frankly, pretty unremarkable.
But then the industry declared victory.
Huh? I quickly re-read the complete ruling, and then re-read it again.
Sure, the Supreme Court had thrown out two minor provisions on parking and listing phone numbers (more below). But the heart of the Clean Truck Program was intact. The trucking lobby had attempted to kill the program in the courts, and they failed. Today we are right where we were on Wednesday, before the ruling. The Port of L.A. has a successful program cutting lethal pollution, and there is still serious work to be done in order to sustain those gains.
An Innovative Program
The Clean Truck Program was developed by the Port of L.A., based on input from theCoalition for Clean and Safe Ports – some 40+ Southern California organizations including environmental, public health and environmental justice groups; immigrant-rights, faith-based, and community groups; unions and worker groups. We were all concerned about a failed port trucking system that provided crappy jobs, failed to mitigate its impacts on the community, and literally killed three people every week from excessive tailpipe emissions.
So the port developed a set of standards for the industry, and required accountability from trucking companies. Hundreds of companies would have to upgrade a fleet of over 12,000 trucks to meet more stringent emissions standards. And those companies would have to sign contracts with the port (“concession agreements”), agreeing to a set of operational standards and port oversight. The idea of port oversight didn’t sit well with the trucking companies, who wanted the basic framework of these agreements thrown out, claiming that the port had exceeded its authority.
Five years later, as the trucking industry continued to fight the program, we’ve managed toreduce truck emissions by 80 to 90 percent.
The Supreme Court Rules
Victory for the trucking industry? Yes, two provisions in the concession agreement were thrown out. The Port of L.A. had required trucking companies to develop a plan for off-street parking, so that local residents would not have to deal with big rig trucks parking in neighborhoods. And the port had required companies to affix a placard on each truck with a phone number, so that community members could call the port if they saw a truck involved in something unsafe. The Supreme Court found that the parking and “How’s My Driving” placard provisions were preempted by a Federal law (the Federal Aviation Administration Authorization Act, or the F4A if you want to sound cool). It is disappointing that these program elements will not be available to residents and other community members affected by the trucking industry.
(A third provision – that would have required trucking companies to hire drivers as employees rather than so-called “independent contractors” – was already struck down in a lower court.)
But the real news is that despite the industry’s crowing, they failed to get what they really wanted: a return to unaccountability. The Supreme Court declined to change the basic structure of the Clean Truck Program: the concession agreement itself. This is the heart of the environmental program, and it remains intact. The Port of L.A. may continue to require that cleaner, less polluting trucks serve the port, that the trucks be properly maintained, and the port remains able to bar trucks that do not comply.
Let me put it like this: It is disappointing to lose the two minor provisions, but there is no way the industry would have invested millions of dollars and taken litigation to the Supreme Court simply to preserve on-street parking and avoid a few “How’s My Driving?” placards.
The problem for the Clean Truck Program today is the same problem we’ve had since day one: the misclassification of truck drivers as “independent contractors.” As many as 90 percent of America’s port truck drivers are misclassified as “independent contractor drivers,” beholden to a single trucking company, paid by the load, but saddled with lease payments and operating costs for trucks they don’t own, and with high self-employment taxes. With no ability to control the fees drivers receive for the containers they haul, there is rarely money left at the end of the month to properly maintain the trucks. This results in trucks that are poorly maintained and are more likely to produce malignant fumes that affect the air quality in the ports and the neighboring communities.
In other words, we’ve done a great job at getting old trucks off the road and new trucks in service, but we haven’t yet solved the problem of sustainability. As one port driver recently said, “I cannot afford to maintain the new truck I drive. We just aren’t paid enough to buy diesel, insurance and tires, and to maintain our trucks to clean air standards. This rig is pretty new, but it’s already falling apart because I can’t afford to fix it. Something has got to change.” Most drivers take home around $30,000 a year; annual maintenance costs exceed $8,500 on these newer trucks.
This is why the Port of L.A. wanted trucking companies to hire drivers as employees: to shift the responsibility for truck operations and maintenance from individual drivers to the trucking companies themselves, which can ensure the trucks are properly maintained.
But there’s more than one reason to address the employment status of drivers. Namely, that – despite what the companies call them – drivers are not truly independent contractors in the first place. Drivers understand that with this bogus label, companies are stealing from them. So drivers have been taking action on their own: filing hundreds of claims with the state Labor Commissioner, and filing lawsuits against the companies they work for, seeking to be recognized as the employees they truly are. Hundreds of thousands of dollars in judgments have already been levied against companies that have inflated profits by pocketing payroll taxes, denying benefits, and pushing maintenance costs onto the drivers.
The Coalition will continue to work with drivers to address the problem of misclassification. And we will work with the port to ensure that, with the litigation in the rear-view mirror, robust enforcement will begin. With these two elements in place, we can shift the Clean Truck Program from the great start it is into the truly transformational program it needs to be.
Jon Zerolnick is director of LAANE’s Clean and Safe Ports Project.
Dateline: Los Angeles/Long Beach
June 13, 2013
Action Needed to Shift Responsibility of Maintaining Clean Trucks to Trucking Companies
LOS ANGELES (June 13, 2013) Today, the United States Supreme Court ruled that the Port of Los Angeles may not implement two provisions of its Clean Trucks Program: its “off-street parking” and “placard” requirements. The heart of the Port’s environmental program adopted in October 2008 – the concessions approach – remains intact. The Port of LA may continue to require that cleaner, less polluting trucks serve the port, and that the trucks be properly maintained. The Port of LA remains able to bar trucks that do not comply with the landmark environmental program, which has widely been credited with reducing toxic truck emissions by more than 90 percent.
“We are pleased that the basic framework of the Clean Truck Program (CTP) remains intact,” said Jessica Tovar of the Long Beach Alliance for Children with Asthma. “The CTP has led to a dramatic improvement in the air quality in harbor communities, allowing children afflicted with asthma to breathe easier. Now we need the trucking company owners – not the drivers – to take responsibility for the maintenance of the trucks so that the air stays clean.”
The misclassification of port truck drivers as “independent contractors” stands at the root of the problem that affects the quality of air at our nation’s ports and neighboring communities. As many as 90 percent of America’s port truck drivers are misclassified as “independent contract drivers,” beholden to a single trucking company, paid by the load, but saddled with lease payments and operating costs for trucks they don’t own, and high self-employment taxes. With no ability to control the fees drivers receive for the containers they haul, there is rarely money left at the end of the month to properly maintain the trucks. This results in trucks that are poorly maintained and are more likely to produce malignant fumes that affect the air quality in the ports and the neighboring communities.
“We can’t afford to maintain the new trucks we drive,” said Salvador Miranda, a misclassified port truck driver. “We just aren’t paid enough to buy diesel, insurance, and tires, and to maintain our trucks to clean air standards. These rigs are pretty new, but they are already falling apart because we can’t afford to fix them. Something has got to change.”
Independent Contract Drivers coast-to-coast are filing “Wage and Hour Claims” with the government agencies charged with enforcing labor laws. Hundreds of thousands of dollars in judgments have already been levied because drivers have been found to be employees – not independent contractors – against companies that have inflated profits by pocketing payroll taxes, denying benefits, and pushing maintenance costs onto the drivers.
Dateline: Los Angeles/Long Beach
April 12, 2013
by Orlando Ayala
I was recently accused of thinking with my heart and not with my head, of letting my passions and outrage get the best of me and guide my actions. At the time, this wasn’t a compliment. But these traits have served me well. If not for them, I may not have crossed multiple borders seeking a better life in the U.S., or been driven to action by the outrage I felt at seeing injustices suffered by the thousands of port truck drivers at the largest port in the country.
Doing away with those injustices — starting at my company, Toll — was something that I and dozens of my co-workers embarked on two years ago. We weren’t foolish enough to think that it was going to be easy, but we decided to organize and fight for improved working conditions, better wages and union recognition anyway. It turned out to be the fight of our lives but we stuck together and now we are proud members of Teamsters Local 848. We are the first U.S. truck drivers in 30 years to win union representation through an election.
I was fortunate enough to be part of the team that negotiated our first contract. Here’s what we won:
A raise and benefits: A better wage is not the only reason we decided to organize. But I can’t lie to you – it is something that has made a real difference for me and my family. Now I earn six dollars more per hour than I was making without a contract. I worry less about whether I can be a good provider for my family. Reducing my out-of-pocket medical expenses is also a huge relief – I went from paying close to $109 a week for my healthcare premium to $40 a week. And it became easier for me and my family to take care of medical needs we’ve been putting off. In fact, since winning our contract, I celebrated by taking all three of my girls to get braces! We also won a pension – something that many of us never had imagined having. Now we have the hope that there is something good waiting for us after a long road and many years working as a truck driver.
Peace of mind: I’ve been driving at the ports for more than 10 years and I’ve never had a minute of peace on the job. The entire time – whether as an “independent contractor” or as an employee driver – I’ve always felt an immense pressure on the job. It’s always been a race – to get the container to the warehouse, to get empties to the port. I drove fast and drove long (sometimes up to 16 hours straight), always feeling like any wrong move, any small mistake could end my job (or even my career). It’s a horrible feeling to have day in and day out. Now that cloud has lifted. There are safeguards in place so that my employer can’t fire me for simple mistakes. I feel like I can be a true professional driver – abiding by traffic laws, driving safely – without being penalized.
Respect: There are some things we won that are worth even more than money. Being treated with respect is one of those. I never believed that simply because I’m an immigrant and don’t have much of a formal education I should be treated with less respect than anyone else. I’ve worked hard and have created great wealth for this country and my bosses, as have many immigrant workers in this country, and I deserve to be respected. When I joined with my co-workers, we gained a level of respect that none of us could ever have won fighting alone.
I was very proud to sit at the negotiating table across from high-level officials from Toll, representing the rest of my co-workers and our interests. It didn’t matter that I don’t speak English or have a degree — I still felt confident and made sure that our demands were heard.
We accomplished something great at Toll. But our work is not done. We can’t be the only port truck drivers with a success story to tell. I hope that our story provides hope and courage to other drivers, and inspires them to organize. It’s not an easy path and there are risks. But we proved that if you are committed and unite with your co-workers, you can achieve great things – respect, a voice, economic security – for you and your family.
(Orlando Ayala has been a truck driver at the ports of L.A. and Long Beach for 10 years. He recently sat down and talked to LAANE Deputy Director Patricia Castellanos about the successful effort to improve conditions at Toll, the global logistics company where he works. Yesterday marked the one-year anniversary of the election in which Toll workers chose to be represented by a union – the first such election in three decades.)
Dateline: Los Angeles/Long Beach
March 28, 2013
I try to cultivate an appreciation for language, linguistic uses and linguistic misuses. I have an especial appreciation for legal writing, in all of its absurdity. I tend to become inured to the way that people – typically more powerful people – use language to obscure rather than to elucidate.
I also read a lot of legal documents, especially agreements between port trucking companies and individual drivers. These tend to be awful, one-sided, unconscionable documents. Port trucking companies employ drivers, and then write “CYA” documents to attempt to hide the fact that they are misclassifying their drivers. The owners create sham truck leases and force drivers to sign them. All par for the course in an industry as dysfunctional as port trucking.
But then I read a sentence like that one, and it can still stop me cold. Read it out loud; let it roll off your tongue:
“Independent Contractor represents that Independent Contractor is an independent contractor.”
We’ve covered the issue of worker misclassification extensively here. Happily, of late we’ve been able to report some positive developments, as when a California court ruled in late February that four port truck drivers were misclassified – the company called them independent contractors when they were actually employees – and awarded them more than $100,000 in owed wages. (The company has announced it will fight the ruling.)
And while California makes slow and fitful progress toward addressing worker misclassification, a new study from the National Consumers League shows that two-thirds of Americans are unfamiliar with the concept of worker misclassification — defined by NCL as “a form of payroll fraud in which an employer intentionally classifies workers as ‘independent contractors’ instead of ‘employees’ in order to deprive workers of their workplace protections and defraud state and federal treasuries out of income taxes.”
Once respondents understood the concept they nearly unanimously agreed that “it is important that companies do not misclassify workers” and that “companies that intentionally misclassify workers… should be fined or punished.”
And no wonder Americans want companies to cut out these shenanigans: While the negative impacts of misclassification fall most heavily on the misclassified workers, we all share the pain. NCL cited a 2009 Government Accountability Office study finding that worker misclassification “decreased federal revenues by $2.72 billion in 2006.”
And the shameful practice appears to be in the rise: “the number of unreported employees identified by [California’s] Economic Development Department increased by a third between 2006 and 2008.” (And this finding is not merely because of increased attention; this was before California began to turn its attention to worker misclassification in a focused way.)
Americans have disdain for the practice and federal and state governments are taking a closer look. In the context of port trucking, the link between worker misclassification and dirty air is established, and the more that courts examine driver misclassification, the more they side with drivers. So what are port trucking companies changing? Their language, of course.
When port trucking companies hire drivers, they generally force them to sign so-called “independent contractor agreements.” These agreements have always been shocking, in the disconnect between what exists on paper and how control is exercised in the real world. Lately, companies are making the language laughable. In addition to the gem I’ve cited above, we recently encountered one agreement between a driver and a port trucking company from 2008 that was then mysteriously amended unilaterally in 2011 (right about the time when governmental agencies began to look more closely at port trucking misclassification).
The new agreement contained not only the standard boilerplate about the driver being an independent contractor, but went further, stating that the driver must “defend, hold harmless and indemnify” the company against any claims (by the driver himself or others) of being an employee. And also that if drivers want to adjudicate their status as employees, the only recourse available to them would be arbitration—not litigation, nor working with the government. (The four drivers whose status was addressed by the court recently had filed wage and hour claims with the California Division of Labor Standards Enforcement.)
But just labeling a relationship as “independent contracting” doesn’t necessarily make it so, no matter how many times you say it, what size font you put it in, or how you intimidate drivers to keep their mouths shut. As California Labor Commissioner Julia Su stated after winning the recent misclassification case, “drivers had signed agreements labeling them independent contractors but the Court saw the truth behind the label.”
Finally, some straight talking we can get behind.
Jon Zerolnick is director of LAANE’s Clean and Safe Ports Project.
Dateline: Los Angeles/Long Beach
February 27, 2013
It’s almost payday. Imagine if you went to cash your paycheck only to find that your employer had instead billed you for the opportunity to work for them.
For drivers at Seacon Logix, paying to work was only the beginning of the abuses they faced from their employer, a midsized port trucking company based in Carson.
A group of nine Seacon Logix drivers has persisted for almost two years in seeking to reclaim their wages even as the company has reached a new low in an already notoriously low-road industry.
Seacon Logix didn’t just evade the law by claiming that its employees were “independent contractors,” allowing it to avoid basic responsibilities, like payroll, income taxes and workers compensation insurance.
It didn’t just pass on its operating costs to drivers and force them to pay for vehicle leases, registration and insurance payments by illegally deducting them straight out of drivers’ paychecks, which frequently left drivers taking home well below minimum wage.
And it didn’t just force drivers to pay for company expenses like fuel and repairs out of their own pockets, which often left them owing the company money after a week’s worth of long days – some of which stretched as long as 17 hours.
Seacon Logix also allegedly discriminated against drivers after they came forward to file claims with the California Division of Labor Standards Enforcement. Then the company appealed the state Labor Commissioner’s January, 2012 ruling that its drivers were, in fact, employees and were therefore owed approximately $30,000 each for about eight months of work.
Finally, on December 28, 2012, Seacon Logix turned around and filed a frivolous and retaliatory lawsuit against its drivers.
Drivers who couldn’t pay for diesel now have to get lawyers.
Yet rather than be intimidated, drivers have filed retaliation complaints with the Labor Commissioner in response to both the lawsuits and the workplace discrimination they allegedly have faced since filing their initial claims.
In the meantime, none of the workers have received their stolen wages. The trial in L.A. Superior Court to hear the company’s appeal of the Labor Commissioner’s rulings began this week, so the first group of drivers will know the outcome soon.
While the depths to which Seacon Logix has sunk to avoid its basic responsibilities to both its drivers and the State of California may appear especially egregious, unfortunately most of the story is standard business practice in the port trucking industry. Roughly 90 percent of port truck drivers are misclassified as independent contractors. Many face similar abuses, taking home less than minimum wage after the company deducts its own operating costs out of drivers’ paychecks. And drivers misclassified as independent contractors are denied paid sick days, health insurance, overtime pay, the right to organize and other basic benefits and rights that employees have.
The drivers at Seacon Logix had the courage to take on their company — and they are winning. The Labor Commissioner’s initial rulings are clear – just because an employer pays its drivers with a 1099 rather than a W-2, it doesn’t mean they are not employees. When the facts on the ground prove otherwise, they are entitled to the same rights as all employees.
The group at Seacon Logix joins port drivers across the country who are fighting for their rights. Drivers at Toll recently set a standard for what a high-road trucking company looks like when they organized to join the Teamsters and won a groundbreaking contract. More such action – undertaken through wage claims, in the courts and by organizing – is needed in order to transform the industry so that low-down practices are the exception rather than business as usual.
(Jessica Durrum is a research-and-policy analyst with the Los Angeles Alliance for a New Economy’s Clean and Safe Ports Project.)