The Crooked Language Behind Job Misclassifications

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.


How Low Can a Port Trucking Company Go?

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.)


ACTION ALERT: DEMAND A FULL REVIEW AND ENVIRONMENT IMPACT ASSESSMENT OF THE BAYONNE BRIDGE EXPANSION PROJECT

The Port Authority wants to modify the Bayonne Bridge to accommodate for more and bigger ships, but the Port Authority shouldn’t be able to expand until there is environmental justice for port communities and economic justice for port drivers.

Already, in the communities’ surrounding New Jersey’s Ports, 1 in 4 children suffer from asthma and the risk of cancer from diesel emissions is hundreds of times the acceptable level. The raising of the Bayonne Bridge threatens local residents and workers with an increase in diesel pollution.

Join our coalition in demanding that the U.S. Coast Guard conduct a full review and assessment of the environmental impacts that raising the Bayonne Bridge will have on the public health of workers and nearby residents.

Authorities must stop ignoring the environmental and public health impacts of a broken port system. Time to assess the problem and fix it.

Sign our petition.


Fighting for Our Communities

Guest blog by Teresa Vallejo

In 1996 I began working at the Parent Center of Wilmington Middle School. I quickly learned how students suffer from asthma, respiratory deficiencies, malnourishment, cancer and autism. Many of these poor health conditions are linked to the pollution and poverty of the area.

I decided to join the Coalition for Clean & Safe Ports, hoping to help clean our air and reduce disease in my community. Over the past several years we have made huge progress. I believe these accomplishments were possible because so many of us came together, from residents and community-based organizations to port truck drivers, lawmakers and unions. Although it is a cliché to say there is strength in unity, in this case it was true.

Today we are fighting to change the conditions of port truck drivers – and we are still unified.

We believe that everyone who works should be valued by their employer. Port trucking companies, however, take advantage of drivers and deny them the rights that other workers have. They are only concerned with their bottom line and how the company will benefit.

These companies must be supervised by labor, human rights and environmental agencies. Right now they do whatever they want in our communities. They park their trucks without complying with city regulations. They drive through streets that are not designated truck routes, which puts residents in danger. It is not the drivers who are at fault for these violations – they are following company orders.

Some port truck drivers have told me they fear losing their jobs because they have been threatened if they question or don’t want to follow the instructions given by the company. Drivers do not have a say and even less of a vote when it comes to the workplace. Even so, they have stood up to demand their rights.

Things are starting to change, however, because of the courage of the drivers. Many of us are supporting them through protests, petition drives and phone banks – and we will continue to do so until drivers see the full benefits of clean trucks. We want this not only for the drivers but for the families of Wilmington. We know that educating our community about the fight at the ports will result in improvements in our community and our environment, and then we will have good green jobs that we can be proud of in our harbor area neighborhoods.

(Teresa Vallejo is a parent resource liaison at the Wilmington Middle School in Wilmington, CA.)


Truck Drivers Clinch New Power with First Union Contract at L.A. Ports!

They did it again, and this time it paid off in a huge way. L.A’s Toll Group drivers, who made national and international headlines in April by overwhelmingly voting to become Teamsters, cemented their place in history by ratifying the first union contract in the drayage industry in 30 years. And boy is the contract a good one! The agreement is highly regarded as a standard-setting first union contract, and viewed as a huge win for any union and a definite game-changer for U.S. port drivers.

The drivers who haul apparel and merchandise shipped to our shores for America’s brand name stores will kick start 2013 with a contractual raise of more than $6 per hour along with paid overtime, sick leave and holidays, a far more affordable health care plan with zero change in coverage, guaranteed shift hours and other provisions to provide job security – plus a pension plan.

“Justice…it’s sort of an indescribable feeling, but it is overwhelming and incredible to finally have the American Dream at our reach,” said Jose Ortega Jr., a driver for global logistics giant Toll Group who served on the bargaining committee for his co-workers along with representatives from the International Brotherhood of Teamsters and Local 848 in Long Beach, Calif. The Australian corporation operates near the nation’s largest port complexes on both coasts and handles accounts for Guess?, Polo, Under Armour and other fashion and sportswear lines sold at big box and department retailers like Walmart and JC Penney.

The landmark agreement culminates more than 24 months of worker struggle and employer resistance in which these truckers – aided by a community coalition, their children, and clergy – borrowed bullhorns, leafleted consumers, gathered signatures practiced their picket lines, staged noisy protests, crashed shareholder meetings in a dogged campaign to end the Third World-like working conditions they once routinely endured.

U.S. port drivers are the most underpaid in the trucking industry: A typical professional earns $28,873 a year before taxes. Their net incomes often resemble that of part-time fast food or retail workers though they clock an average of 59 hours a week. They must possess specialized skills and licensing to safely command an 80,000 lb. container rig, but they fit the profile of America’s working poor. Food stamps, extended family, or church pantries are needed to get by; their children often lack regular pediatricians or only receive care at the public ER.

With American wages in freefall due to the imbalance of power enjoyed by multinational corporations, the scope and significance of such a labor accord with a transportation titan that operates in some 55 countries is alone a jaw dropper. What observers further find remarkable: The 65 workers who secured these middle-class benefits with their $8 billion employer are blue-collar Latino-Americans who hold jobs within a deregulated, virtually union-free industry at the ports.

“It upends the common wisdom that a workforce that lacks rights on the job cannot build the courage or bargaining strength to take on the Goliaths of the global economy. But these drivers, like the workers at the warehouses and Walmart and Wendy’s, understand they cannot raise families on such low wages, so they are coming together to rewrite the playbook,” noted Dr. John Logan, the director of Labor and Employment Studies at the College of Business at San Francisco State University. “The faces of this new movement are ordinary parents and churchgoers and community members who value the influence of a local priest as much as the expertise of an international overseas union. Not only do they have the guts to strike – they have the faith they can win.”

Their collective resolve paid off. Mr. Ortega, a single father who works the night shift, will see his new per-hour rate of $19.75 reflected on his next paycheck, plus any overtime will be paid at a time-and-a-half rate of $28.

“As a truck driver, I wanted the assurance that things would be okay for my daughter if I was injured, that I could take her to see the doctor if she got sick,” the 36-year-old explained. “When we started organizing ourselves, we weren’t asking for anything out of this world. To be treated with dignity. A fair day’s pay for a hard day’s work. Decent, sanitary facilities to make a pit stop, rest, eat…you know, perform our jobs safely.

“But we knew winning basic respect would take a fight at every turn. So when we were afraid to lose our jobs, we asked our allies for help. When we were afraid to take action, we prayed for the courage to speak out. And we always stuck together, and never ever gave up.”

Elected leaders praised the union contract as both a middle-class builder and noted its high-road business merits.

“We’re talking about the men and women who are the backbone of our regional and national economy, yet they have never shared in the prosperity of the corporations they make so profitable,” said Los Angeles Councilman Joe Buscaino, whose district includes the largest port in America. “The standards that Toll Group, its workers, and Teamsters Local 848 have set make it possible to reward and attract responsible port businesses that want to compete on a more level playing field based on innovation and quality, rather than who can pay Los Angeles’ vital workers the least.”

Contract Highlights:

Fair wages –The day shift hourly rate increased from $12.72 to $19, and the night shift hourly rate from $13.22 to $19.75. In addition to the over $6/hour increase in hourly pay rates, drivers won $0.50/hour per year raises over the life of the contract, giving Toll port drivers over a 60% hourly wage boost over the life of the 3-year contract. Overtime pay of time-and-half kicks in after a typical full time 40-hour week, which is extremely rare in an industry where truckers are exempt from federal overtime laws and an average week hovers around 60 hours.

Secure retirement –Prior to the contract, less than a dozen Toll drivers could spare any extra dollars, even pre-tax, to participate in the corporate 401(k) plan. As Teamster Local 848 members, they have been automatically enrolled in the union’s Western Conference Pension Trust. Such a retirement plan at the port has rarely been seen since trucking was deregulated in 1980. Toll will make a pension contribution of $1/hour per driver until 2014, and a $1.50/hour per driver by 2015.

Affordable health care – The Toll Group health care plan was financially out of reach for most of its truck drivers. The few who managed to meet the premium, deductibles and copayments will now keep significant more money in their pocket without sacrificing coverage, and the rest of their co-workers finally have access to quality, affordable health insurance coverage, including dental and vision care.  The company will pay 95% of the premium for individuals and 90% for family coverage. Drivers who previously had to shell out $125/month for individual or $400/month per family will drop to roughly $30 or $150, respectively.

Stable work hours and paid time off – Most truck drivers lose a day’s pay if they cannot work, are penalized by dispatchers for being unable to haul a load, and lack paid sick or holiday leave, making it stressful for family budgets and planning. But Toll drivers made substantial gains in all these areas. They will receive seven paid holidays, three paid personal days, and six paid sick days annually. They will accrue one or two weeks of vacation within the first two years of service, with longtime employees earning up to a month. They can also bank on guaranteed full- or half-day of pay regardless of seasonal slowdowns if they are scheduled to work.

Incentives to grow responsibly, level competition, and raise market standards – The agreement establishes a high-road business model for the port trucking industry that recognizes Toll’s competitors have not yet embraced livable wages and working conditions. To encourage a more level playing field and wide-scale unionization, drivers will have the ability to re-negotiate for improvements when a simple majority of the Southern California market is organized.

“We commend the drivers at Toll for their leadership in challenging the status quo at the ports. Workers everywhere are standing up and saying enough to poverty wages and Toll drivers have demonstrated that working families are ready to bring middle-class wages back to America,” said Teamster General President Jim Hoffa.

“For too long companies in the global supply chain have gamed the system by undercutting U.S. businesses that actually create good jobs. Toll Group and its drivers have raised the bar for responsible competition, and the Teamsters will not stop until the rest of the nation’s port drivers have a shot at the American Dream.”

Drivers from coast to coast in the virtually non-union and deregulated sector are eyeing the pact as a huge leap forward for the profession with the potential to trigger sweeping changes in the industry. Click here to see an infographic on how the L.A. Toll Teamsters stack up against the rest of the industry.