On the first business day following a meeting truck drivers had with a lawyer to file a wage theft lawsuit against Proud 2 Haul, Ivana Koprowski, the owner, terminated two of the drivers who attended the meeting. Felix Jay and Gonzalo Chirino claim that they were told their terminations were for “working against the company and not with the company.”
In response, truck drivers filed charges with the labor board and organized a rally at the Tullo Truck Stop in Kearny, NJ in support of the two terminated drivers.
Flanked by community leaders and Teamsters, Felix and Gonzalo marched into Proud 2 Haul’s offices to demand that they be reinstated, with back pay and full employee rights for all drivers at the company.
“I’ve been hauling containers for three decades at these ports and over the years conditions for truck drivers have only worse,” said Felix Jay a married father of five and one of the drivers who was terminated. “Low-road companies like Proud 2 Haul and ruthless owners like Ivana Koprowski have made it impossible for port truck drivers to earn a living. They never miss an opportunity to deduct money from our paychecks or to deny us basic employee rights.”
What is the trucking industry response to claims that port drivers are actually employees who have been stripped of their basic rights by trucking companies? Robert Digges, a spokesman for the American Trucking Associations, tripped on his own tongue on a CBS national news segment when he tried protesting the idea that trucking companies are cheating workers – and it’s getting picked up on blogs like the Daily Kos.
“They (trucking companies) believe they get a more productive employee – excuse me a more effective worker – a worker who is efficient, who has some skin in the game.”
So, the industry that dismantled the Los Angeles Clean Truck Program finally lets the truth slip: port truck drivers are actually employees who have had their rights stripped from them by greedy port trucking companies seeking to pad their bottom line.
“As long as we are independent contractors (the company) doesn’t have to cover benefits, they don’t have to cover sick days, bereavement leave time, holiday pay. It just saves the company money,” said Dutch Prior, a port driver for Shippers Transport in Oakland.
While the scheme is a boon for port trucking companies like Shippers Transport, a subsidiary of the giant SSA Marine (half-owned by Goldman Sachs), it’s drawing the attention of the Occupy movement and the Department of Labor.
“These (practices) have astronomical impacts on local governments, state governments and federal government and also hurts good, legitimate businesses that are playing by the rules and for employees that are being ripped off,” said Hilda Solis, the head of the US Department of Labor.
Last year the agency collected more than $5 million for nearly 8,000 misclassified workers, but with 300 new investigators on staff the Department of Labor will be looking more closely at misclassification schemes.
On December 12ththe Occupy movement is organizing a shutdown of the West Coast ports while the Occupy protesters in New York take their case directly to Goldman Sachs on the same day (Goldman Sachs – half-owner of SSA Marine – has its own checkered history with paying taxes. It’s easy to understand why the Occupy folks are targeting the company in the coordination with the port shut down.)
The CBS Early Show segment is only the latest in a series of investigative news pieces on the port trucking industry generally and on Shippers Transport in particular.
Salon.com interviewed Leonardo Mejia, a truck driver for Shippers Transport who works out of Long Beach. “Mejia is part of the shadow economy, though not in the sense that that term is commonly understood: as an autonomous netherworld entirely off the books and underground, invisible to the taxman and mainstream society. Mejia’s shadow economy is something a little different; purposefully created from the top down, its growth driven by employers increasingly eager to shed costly, legally mandated commitments to their employees.”
New laws will help port truck drivers and other employees who are purposely misclassified by their employers, but enforcement of new and existing laws is key. Without strict enforcement from government agencies an imbalance of power exists which keeps truck drivers under the thumb of the giant trucking companies like Shippers Transport.
“There’s an imbalance of power in the market which enables the big shippers to control the cost of shipping,” According to Dr. David Bensman, a professor at Rutgers University and author of “The Big Rig”, a report about misclassification in the port trucking industry. “And as long as you have that imbalance of market power you are going to have intense competition and substandard industry practices.”
*This guest blog by Jon Zerolnick was originally published on on LAANE’s blog The Frying Pan.
Fun fact: L.A. leads the nation in jobs—just the kind that most people don’t think of as jobs. We’re the national leader in “nonemployers:” entities relying on independent contractors rather than employees. As economist Jack Kyser explained in 2006, “a lot of people want to have a business but don’t want the headaches of actually having to employ people.” The Times cited Kyser in explaining that “businesses become nonemployers to avoid the costs of workers’ compensation, paid leave, health insurance and state taxes.”
In many cases this sort of practice is, not to put too fine a word on it, illegal. Starting in just a few weeks, though, the state has a powerful new tool to deal with these lawbreakers. SB 459 goes into effect on January 1, 2012, and it levies large fines against employers who willfully misclassify workers as independent contractors to avoid their legal and tax responsibilities.
Not only will this lead to the potential recovery of hundreds of millions of dollars of lost revenue to the state, but it has the potential to dramatically improve the lives of workers.
Workers like Leonardo Mejia. Mejia — profiled recently in a piece on Salon.com that exposed this scam — is a truck driver at the Ports of L.A. and Long Beach. He works for a company called Shippers Transport Express, a subsidiary of the massive SSA Marine, which is itself half-owned by Goldman Sachs. Shippers Transport classifies Mejia as an independent contractor, and gives him an IRS Form 1099 instead of a W-2. But Mejia shows up for work every day at the time and place that the company tells him to. He accepts every truck load given to him by the company, or risks loss of future work assignments. He drives a truck that is registered to the company, and his lease with the company specifies that he cannot use the truck to drive for any other company. He does not bargain for the rates he is paid: the rates are set by the company, and he can take it or leave it. If he chooses to leave it, he turns in his truck and looks for another job.
With his last $8 in his wallet, Alberto Quiteno said goodbye to his wife and teenage daughters last Friday and traveled 8,000 miles to Melbourne to plea to his employer, the Australian logistics giant, Toll Group, for humane working conditions in the United States.
In his carry-on, Alberto had carefully packed a petition signed by 62 (out of 75) co-workers that local management had previously refused to accept. Along with it was a copy of his sincere letter he sent to Toll CEO Paul Little before his journey to outline the mistreatment and local management missteps. Hearing no response, Alberto headed to LAX and boarded a plane, joined by officials representing America’s largest transportation union, the 1.4 million-member International Brotherhood of Teamsters.
It took an overseas pilgrimage to grab front-section seating at the $8.6 billion corporation’s annual shareholder meeting to nab the undivided attention of the top brass. Alberto even landed a meeting with Mr. Little and another top executive, CFO Brian Kruger. Mission accomplished? Wrong. The 17-year port driver was stunned to learn he had no job to return to once he flew home.
That’s right, after a 30-minute face-to-face and cordial encounter with the retiring executive and his successor, Quiteno – along with 25 other Toll drivers — were all sacked.
The final paychecks of “The Toll 26” were dated and cut on Thursday, October 27, when employees from both the day and night shifts, in a show of unity, clocked in to work wearing T-shirts of the union they desperately want to represent them. That same afternoon 200 community residents, environmental and labor advocates picketed in support of the drivers outside the company’s San Pedro facilities, complete with 1,000 hand-gathered signatures urging justice for the workers who are the backbone of the port economy.
The workers filed another set of retaliation charges at the labor board on Monday, adding a new layer to an ongoing federal investigation. But first, some more backstory from Down Under.
The Toll shareholder meeting was quite the spectacle. Alberto’s allies roamed inside the halls circulating a new white paper by investor analysts with evidence that Toll’s instigation of a contentious low-road relationship with their truck drivers at American ports – at odds with their constructive labor approach in Australia – is a risky move that impairs the company’s reputation, operations, and relations with their retail customers.
Outside, Aussie Toll employees and officials from the Transport Workers Union staged a “sausage sizzle.” It was a lampoon-like BBQ fundraiser for their cash-strapped mates in the U.S., larded with a heavy point: Toll’s non-union employees at the Ports of Los Angeles, Long Beach, Newark and New Jersey do not earn a fair day’s wage for a hard day’s work like their 12,000 unionized counterparts in Australia.
And in the virtual arena, the Teamsters and the Transport Workers Union together launched a website to detail the grim truth at Toll Group in their new joint effort aptly titled GrimTruthAtTollGroup.com.
The result of Alberto’s presence and his backers? Mr. Little was forced to publicly defend his actions which include banishing his truck drivers to filthy, unsanitary outhouses that lack running water. There would be no “riding off into the sunset” for Mr. Little after what should have been his final “legacy” presentation to shareholders, thanks in part to the scrutiny and negative press of Toll’s U.S. operations.
Pretty pathetic for a profitable company that is sending away its head honcho with a golden handshake worth millions. And pretty risky for a company that recently announced its intension to expand its U.S. acquisitions but already carries cargo for popular fashion retailers that come with sweatshop baggage like Guess? and Ralph Lauren’s Polo.
So let’s say you work in one of America’s most dangerous industries, like trucking at the ports. You see faulty chassis, overweight containers, unlabeled containers full of hazardous chemicals, et cetera.
But what if industry schemes prevent professional drivers from blowing the whistle on safety violations even when it’s their job to safely command 80,000 pounds of truck and cargo? For starters, you could leak it to the press.
Seattle’s King TV 5 News sent investigative reporter Chris Ingalls to the docks to find out more.
Ingalls’ report, Container trucks near Port of Seattle most dangerous in the state turned up Washington State Patrol records showing chronic safety violations so serious that officers pulled 32% of the container haulers they inspected off the road — a rate twice as high as for trucks throughout the state. When specially trained officers conducted more thorough inspections this year, 58% of Port of Seattle container haulers were put out of service because they were too dangerous.
These problems are not confined to Seattle. Safety violations are rampant all across the country. The Los Angeles Times detailed “a shadowy economy of risk-taking drivers and discount mechanics, body workers, welders and junkyards – legal and otherwise” who keep port trucks on the road. When a llantero, the Spanish name for those who regroove worn tires with a hot knife, pointed out a potentially deadly bulge in a client’s rubber tire, the driver shrugged and told the reporter:
“It’s dangerous and irresponsible … But I don’t have money for new tires. I’m behind on my bills. As long as the California Highway Patrol doesn’t stop me, I’ll keep doing it.”
Why is this happening? The reason is simple. Wealthy shippers and cargo owners rig the port trucking system for their own profit without regard to the safety of others.
Mile after mile and heavy loads take a toll on big rigs. Tires, brakes, brake lights, anything that moves on a truck needs to be repaired and maintained. And when they’re not, truck drivers and the public are put in danger.
Just ask Bob Kentner, whose windshield was shattered by a flying port truck brake part. He was lucky. He wasn’t hurt, but he could have been. ”Had it been three or four more inches to the left or right I could have had my head decapitated,” said Kentner.
In a follow up segment, Behind the Scenes: Who has to fix the dangerous truck?, King 5’s Ingalls explains that cargo trucks typically have three different owners: the driver owns the cab; a terminal operator owns the chassis; and a shipping company owns the container. But guess who pays when a part breaks or a shipper packs a container over the legal weight? You got it. Not the terminal operator. Not the shipping company. It’s the port driver who typically makes about $29,000 and cannot afford the repairs and fines.
Shippers and trucking companies force these costs onto drivers through a scheme known as illegal misclassification. They pretend that the drivers are ‘consultants’ or ‘independent contractors’ responsible for all their own business costs while maintaining tight control over how they do their work. With the costs of doing business put on the backs of port drivers earning poverty-level wages, it’s no wonder necessary repairs don’t happen. And it’s the drivers and the public whose safety is put at risk.
