Port Drivers’ Misclassification Homesick Blues

Almost 50 years ago, Bob Dylan recorded with an electric guitar and band for the first time and produced Subterranean Homesick Blues, a culture-altering event that claimed, among other things, that, “you don’t need a weatherman to know which way the wind blows.”  That song signaled a cultural change that resonated with forward-looking people of the time, but the truth was ignored or dismissed by those who preferred to look back.  Similarly, this is a moment when the wind is blowing strongly in the direction of justice, and those who ignore it risk being left behind.

In previous articles, we have highlighted the prevalent fiction of “independent contracting,” a deception that affects the 12,000 port truck drivers who dray goods out of the Ports of Los Angeles and Long Beach, among the 75,000 drivers nationwide. Drivers in the current system must pay a lease on a truck, as well as fuel and maintenance.  In return, they receive paychecks that sometimes run into negative numbers and have the same restrictions employees have: no right to take other work, no chance to own a truck, and retaliatory employers threatening them when they speak up.  These drivers, who work long hours delivering goods from towels to tires, sunglasses to smartphones, have been taking action of late. They are demanding that they be afforded the basic rights of any worker in this country, including minimum wages, health and safety protection, workers’ compensation, and Social Security.

In the first few months of 2014, the layers of fraud that the industry hides behind have become thinner and more tattered.  Drivers have taken action in every forum they can find to make their case for basic employment rights, and in every case, they are winning.

Over 20 private lawsuits have been filed in State and Federal court, going back years and alleging millions of dollars in damages.  One of the first cases, filed in 2012 against Shippers’ Transport Express, received class certification in March. Three hundred and seven former and current drivers from Shippers are pleading for justice in the form of both back wages and a finding that the independent contractor system is a fraud.

The appeal process, too, is turning out to be a losing path for the industry.  Last week, three drivers for Mayor Logistics who won their cases at DLSE over a year ago defeated the appeal that the company filed in state court.  This is the second company to lose its appeal.

The hits keep coming at this point. Every driver who has made it through the Labor Commission process has won, and been awarded back wages and penalties, with dozens more hearings scheduled for this spring and summer. In March, the National Labor Relations Board found that the drivers at Pacific 9, a company whose workers filed complaints of retaliation, are employees and have the right to organize a union if they choose.  The company settled this charge and allowed a posting to that effect, a sign that some companies are running out of ways to say no.

The taxman is getting in on things as well.  The California Employment Development Department, the agency that collects the payroll taxes that pay for unemployment insurance, is auditing Pacific 9 for not paying any taxes all these years, and found that these same drivers are employees and that the company subsequently owes the state millions of dollars.

The industry’s desperate legal flailings that Jon Zerolnick described in these pixels in December are also falling apart.   The attempt by five companies calling themselves the “Clean Truck Coalition” to sue California Labor Commissioner Julie Su for having the temerity to enforce state laws against them has been dropped before making it to hearing.

See a pattern here? As Jared Bernstein put it in his intro to the Big Rig Overhaul, “In the economists’ jargon, we now live in a “dual equilibrium” world, where we can produce our output in ways consistent with what many would view as socially and economically fair, or not.”   Every day, more drivers use their power send the message to the goods movement industry that fairness is no longer optional.

At this point, it is a question of when, not if, the smarter companies in the industry will move to formally employ their drivers in a legitimate business structure. The question is, what will it take for the rest of the trucking industry to realize that the free ride is over?  With each finding of misclassification, every lost appeal, every time a group of drivers get together to demand an end to illegal deductions, the fiction dissipates, it’s becoming clear to everyone else that the gusts of change are gathering. Employers who ignore these winds will find themselves out in the cold, wondering what happened.

Sheheryar Kaoosji is Director of the Campaign for Clean and Safe Ports at the Los Angeles Alliance for a New Economy.