In attempts to push back against the campaign to turn independent owner-operators in the port drayage industry into employees, the statewide trucking trade association filed a lawsuit last week against various state officials and agencies.
The California Trucking Association (CTA) is fighting back against the campaign to turn independent owner-operators in the port drayage industry into employees.
Last week, the statewide trucking trade association filed a lawsuit in state court against various California officials and agencies, claiming they are willfully violating the state’s public records laws and depriving businesses of due process in a coordinated effort to change the legal relationship between thousands of small business owner-drivers, from a business-to-business transaction into an employer/employee relationship.
The CTA lawsuit was filed in Orange County Superior Court against California Labor Commissioner Julie Su, the California Division of Labor Standards Enforcement, the California Labor and Workforce Development Agency, California Secretary of Labor David Lanier, the California Department of Industrial Relations, and Director of the Department of Industrial Relations Christine Baker.
The CTA said for years, its members have not been provided with a fair and unbiased forum when the California Division of Labor Standards Enforcement (DLSE) exercises its power to decide driver claims through so-called “Berman Hearings.”
“In 1976, the California Legislature created the Berman Hearing process for the purpose of creating a swift, informal, affordable and fair method of adjudicating low-value wage claims in order to avoid costly and time-consuming judicial proceedings,” the lawsuit explained.
CTA CEO Shawn Yadon said the DLSE has taken a policy stance “that there are no
legitimate independent contractor scenarios and all of these Berman
hearing cases have been basically prejudged.”
Regardless
of the unique facts of each case, he said drivers are “judged to be
misclassified and the decision is to classify that individual as an
employee and not an independent contractor.”
To date, the decisions have primarily involved drayage truck drivers, Yadon said.
Historically, the Berman Hearing process has not been used for complex, high dollar issues, but rather for resolving basic, cut and dry wage violation scenarios, Yadon explained. “That has helped speed up the process and keep some of those basic cases out of the court system, which is probably a good thing,” he said.
However, more recently, the DLSE has decided to bring these larger, more complex misclassification allegation cases before a Berman hearing, according to Yadon.
The average awards to drivers who claim they have been misclassified has been close to $120,000, and some awards have been even higher, while in the past, it was extremely rare to see Berman Hearing awards as high as $30,000, and generally they were much lower, he said.
The Teamsters and its affiliate, Justice for Port Drivers, have organized numerous strikes at the ports of Los Angeles and Long Beach in attempts to force companies to recognize independent owner operators as employees.
Fred Potter, international vice president of the Teamsters and director of the Teamsters Port Division, said, “The CTA’s 11th hour lawsuit against the government for enforcing the law is nothing more than a desperate attempt to hang onto an illegal business scheme that impoverishes workers, creates unsafe roads and toxic air, and allows hundreds of California businesses to evade paying taxes. Low wage workers should not be forced to bear the burden of operating their employer’s business.
“The California Division of Labor Standards Enforcement (DLSE), the California Employment Development Department (EDD), the California Superior Court, the National Labor Relations Board (NLRB), and the U.S. Department of Labor (USDOL) have all consistently ruled that port truck drivers are misclassified as ‘independent contractors,'” Potter said.
Weston Labar, executive director of the Harbor Trucking Association, which represents port drayage companies in Southern California, said his organization “commends the California Trucking Association for stepping up to the plate and tackling this issue. The issue of misclassification is the top issue in the trucking industry right now and California has not had a fair, transparent, and open process in making decisions. We look forward to seeing how this lawsuit progresses and hope that the it can help restore balance in what has been a completely one-sided affair thus far.”
Yadon said there is another side to the lawsuit that focuses on alleged public record violations by the state agencies.
Since 2013, he said the CTA has been seeking information through public record act requests from the DLSE and the Department of Industrial Relations.
“We show quite clearly in the lawsuit how those requests have either been ignored or they’ve been stonewalled or just basically denied,” Yadon said.
“The lack of transparency to date has been astounding,” he continued. “The California Public Records Act is a critical tool to hold government officials accountable. But despite repeated inquiries – and even agreements to narrow the scope of our requests – the Defendants have stonewalled us in a direct violation of state law. The conduct is more than suspicious. We hope that this lawsuit will bring needed sunlight to the actions taken by the Labor Commissioner and the DLSE.”
California Trucking Association fights back on labor issue
