The city of Los Angeles filed lawsuits Monday against three trucking companies that haul goods at Southern California ports, alleging they denied wages and benefits to drivers by illegally classifying them as independent contractors rather than employees.
The lawsuits seek to bar the three companies from classifying drivers as independent contractors that allegedly should have been full-time employees. Los Angeles City Attorney Mike Feuer said the practice is common among the roughly 1,000 trucking fleets operating at the Port of Los Angeles, the nation's busiest gateway for imports. Contractors aren't eligible for benefits owed to employee drivers, including unemployment insurance, workers' compensation and overtime pay. The lawsuits ask that the companies compensate drivers for back pay and pay civil penalties of up to $2,500 per violation.
"We brought lawsuits against these companies because we're trying to create systemic change," Mr. Feuer said in a press conference Monday, adding that the city attorney's office is continuing to investigate still more port-trucking companies.
The three companies named in the lawsuits are CMI Transportation LLC, K&R Transportation California LLC and Cal Cartage Transportation Express LLC, all owned by New Jersey-based NFI Industries. A lawyer for CMI couldn't be immediately reached for comment. A representative for Cal Cartage declined to comment on behalf of Cal Cartage and sister company K&R. NFI didn't immediately respond to a request for comment.
Independent drivers for many of Southern California's port-trucking companies have been making similar allegations for years, filing hundreds of wage-and-hour complaints with the California Labor Commissioner's Office, and winning tens of millions in back pay. Driver organizers say that trucking companies push their costs, such as fuel, insurance, maintenance and lease payments, onto the drivers. And they say they're not compensated for many of the hours they work, such as the time spent waiting in line to pick up goods.
But Monday's lawsuits marked a turning point in that legal battle, organizers said.
"It feels like a landmark day," said Barb Maynard, spokeswoman for Justice for Port Drivers, a campaign supported by the International Brotherhood of Teamsters that has been organizing drayage drivers at ports around the country -- most heavily in Southern California. Unlike the individual wage-and-hour claims, these lawsuits go after companies as a whole for unfair business practices under California law, Ms. Maynard said. "It's really what's been needed...We've been waiting for this moment for quite a while."
The $14 billion-a-year port trucking business is highly fragmented. Nationwide, there are about 2,000 port-trucking firms, many of which run 100 trucks or fewer. At the Port of Los Angeles, there are about 1,000 operators, some of which run only one truck.
These firms contract and subcontract with large retailers and manufacturers, hauling containers from the docks to rail yards and freight depots, a key journey of just a few miles that allows these firms to quickly move their imported goods to stores and factories across the country.
Weston LaBar, chief executive of the Harbor Trucking Association, which represents trucking companies at the ports of L.A. and Long Beach, said, "The City of Los Angeles has taken up an issue at the behest of organized labor without sitting down with companies to understand the industry, or any of the thousands of drivers that prefer to be independent contractors."
Of the more-than 10,000 port truck drivers in the Los Angeles area, about 90% are independent, Mr. LaBar said. For many of them, their independent status means they can theoretically make more money than full-time employee drivers, depending on how many loads they carry each day.