LA Port-Trucking Firms Run Into Labor Dispute
Short-haul trucking industry weighs into legal debate over how to classify workers
The trucking industry is bracing for the classification fight to spread to U.S. ports beyond the ports of Los Angeles, shown, and Long Beach. PHOTO: PATRICK T. FALLON/BLOOMBERG
By ERICA E. PHILLIPS
Updated May 11, 2016 2:48 p.m. ET
LOS ANGELES—The nation’s busiest ports are emerging as a key battleground in the legal fight over whether truck drivers should be counted as employees or independent contractors.
Several trucking companies operating at the ports of Long Beach and Los Angeles have filed for bankruptcy protection in recent months, citing mounting costs to settle hundreds of legal claims. These operators haul containers from the docks to rail yards and freight depots, a key journey of just a few miles that allows major retailers and manufacturers to quickly move their imported goods to stores and factories across the country.
The bankruptcies in the trucking sector come as some higher-profile cases in the debate over employee status are paying out hefty settlements. Ride-hailing service Uber Technologies Inc. agreed to pay as much as $100 million to drivers last month, and delivery company FedEx Corp. reached a $228 million settlement last year. But in the $12 billion-a-year port-trucking business, known as drayage, where hundreds of small operators compete on thin margins, the cost to settle similar claims can be overwhelming, analysts say.
The turmoil raises questions about the future of short-haul trucking at the nation’s ports. Litigation with drivers and the higher cost of full-time labor could force drayage operators to charge more for their services or it could put them out of business entirely, reducing the overall number of carriers and raising costs for shippers, analysts say.
The trucking industry is bracing for the classification fight to spread to other ports. “As most things go in trucking...California leads the way,” said Curtis Whalen of the American Trucking Associations, an industry group. “Having this hanging over your head is obviously not good.”
Since 2011, 799 complaints have been filed against port-trucking companies with the California Labor Commissioner’s Office, alleging drivers were misclassified as independent contractors and denied the wages and benefits afforded to full-time employees. A total of more than $35 million has been awarded to drivers in those cases, according to the Labor Commissioner’s Office.
Over a dozen class-action lawsuits alleging misclassification at the port-trucking companies are pending in California courts. And the National Labor Relations Board recently filed a complaint against a California port-trucking company that is one of the first to include the allegation that drivers’ misclassification as independent contractors violates the National Labor Relations Act.
Some trucking companies say the drivers filing legal claims over misclassification amount to a relatively small number in the Southern California industry. “Most drivers aren’t looking to become employees,” said Weston LaBar, executive director of the Harbor Trucking Association, which represents trucking companies at the ports of Los Angeles and Long Beach.
Noel Perry, an economist with FTR Transportation Intelligence, a freight-market analysis firm, estimates that there are about 2,000 port-trucking companies nationally. Drayage companies tend to be small, running 100 trucks or fewer.
Publicly traded logistics company Hub Group Inc. recently closed its Southern California ports operation, a little over a year after converting the local fleet from independent contractors to full-time drivers, citing “unsustainable” costs.
‘Unless everybody else is forced to use the same [full-time] labor, these companies won’t be able to raise their prices to pay for it. ’
—Noel Perry, an economist with FTR Transportation Intelligence
Last month Pacific 9 Transportation filed for bankruptcy protection, citing among its debts nearly $7 million it owes to drivers after losing several claims before the state labor commissioner. Premium Transportation Services Inc., one of the largest port-trucking businesses in Southern California, filed for bankruptcy protection in March, telling the court it couldn’t afford the costs of litigation with drivers. A handful of other port-trucking companies in California have made similar claims in bankruptcy filings in recent years, and some have shut down.
“Unless everybody else is forced to use the same [full-time] labor, these companies won’t be able to raise their prices to pay for it,” said FTR’s Mr. Perry.
As many as 25,000 drayage drivers, the vast majority of them independent, make the trek to and from port terminals in California every day. 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.
Justice for Port Drivers, a campaign supported by the International Brotherhood of Teamsters, is organizing drayage drivers at ports around the country—most heavily in Southern California. The 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.
Drivers at drayage firms owned by XPO Logistics Inc. say they were improperly classified as contractors and are owed up to $200 million in unpaid wages. A handful attended the company’s annual shareholder meeting on Wednesday to voice their concerns.
“We have excellent relationships with our employees and the owner operators who serve our customers,” an XPO spokesman said on Tuesday.
The California Labor Commissioner’s Office last week began offering port-trucking companies “amnesty” from any penalties they’ve incurred for misclassifying drivers if they voluntarily make their drivers full-time employees and provide back pay. The state Department of Industrial Relations said Tuesday that no companies have applied for the program so far.
Jackie Mattare, president of trucking company Desert Express, said she has employed full-time drivers for 20 years and she thinks other operators should, too. If everyone faced the same employment costs, rates for drayage services wouldn’t be so low, Ms. Mattare said, “and the industry will become a safer and more viable place to work.”
—Loretta Chao contributed to this article.
Write to Erica E. Phillips at firstname.lastname@example.orgTags: Trucking industryport drivers
By Admin - Portland IWW, May 1, 2016
Portland, OR – In a historic move, workers at Portland-area fast food chain Burgerville announced at a rally in the Clinton Street Theater on April 26th that they were forming a union, the Burgerville Workers Union, in affiliation with the Portland branch of the IWW. They marched from the theater to the Burgerville location at Southeast 26th and Clinton to present their demands:
- an immediate $5 an hour raise
- affordable, quality healthcare
- a safe and healthy workplace
- fair and consistent scheduling with ample notice
- a supportive, sustainable workplace including paid maternity/paternity leave
- free childcare and transportation stipends
A typical Burgerville worker makes only $9.60 an hour, and is typically scheduled just 26 hours a week, just under the 30 hours a week which would make them eligible to receive benefits. That equals out to about $990 a month before taxes. To put that into perspective, the average apartment rent in Portland is $1,275 a month for a one bedroom apartment, and most apartment complexes require prospective tenants income to exceed 3 times the amount of the rent.
“Most people can’t even afford to have an apartment. In Portland, everyone knows that the cost of living is insane. It basically took me a second job to be able to have a place of my own. I couldn’t afford it with what Burgerville pays me,” said Greg, Burgerville worker and union member.
Other workers cited problems with management’s uncaring attitude toward their employees: “I need to be able to take a sick day without fear of retaliation,” stated Robert, a Burgerville worker at the Powell location.
The workers forming the Burgerville Workers Union represent a cross-section of the community – young people, seniors, mothers, fathers, students, and grandparents. They put passion into their work, and want to improve their workplaces for themselves, their co-workers, and the community.
“We’re trying to make Burgerville a better place – I just want to be able to do my job and be paid a living wage. This is going to make Burgerville better, by having happy employees that work hard and are proud of their jobs” said Debbie, Burgerville Worker Union member.
The Burgerville Workers Union is supported by the Portland IWW and endorsed by a coalition of local unions and community groups, including ILWU Local 5, IATSE Local 28, SEIU Local 49, Portland Association of Teachers, OPAL Environmental Justice Oregon, Portland Solidarity Network (PDXSol), Portland Jobs with Justice, Blue Heron Collective (Reed College), Portland Central America Solidarity Committee, Alberta Cooperative Grocery Collective Management, Hella 503 Collective, Marilyn Buck Abolitionist Collective and People’s Food Co-op.
To lend your support and solidarity, check out the Burgerville Workers Union website.
- PRISONERS ORGANIZE: Free Alabama Movement spreads to Virginia as prisoners take up IWW banner
- TEACHERS FIGHT BACK: Teachers, students, parents and others fight austerity across the United States
- HOUSING STRUGGLES: Portland Tenants United organize against eviction and displacement
- ....and more!
See attached, or view & share the issue online!
'We're just getting started': inside Austin's contentious clash with Uber and Lyft “These guys out in Silicon Valley like to consider themselves disrupters, but they’re just another version of what we’ve had before: big business [types] who think they ca
'We're just getting started': inside Austin's contentious clash with Uber and Lyft “These guys out in Silicon Valley like to consider themselves disrupters, but they’re just another version of what we’ve had before: big business [types] who think they can write their own laws.”
As thousands of techies head to Austin for SXSW, one city councilwoman stands to lose her job over a regulatory showdown with the ride-sharing firms
Councilwoman Ann Kitchen has proposed rules such as driver fingerprinting. The backlash against it might see her become the first woman in the city’s history to be booted from office. Photograph: Lizzie Chen for the Guardian
Nellie Bowles in Austin
Thursday 10 March 2016 14.27 ESTLast modified on Saturday 7 May 2016 10.13 EDT
Ann Kitchen never imagined the repercussions of her decision to regulate Uber, the ride-hailing behemoth with a valuation of $62.5bn and – she now knows – a reputation for taking no prisoners.
The 61-year-old Austin councilwoman had the temerity to propose that Uber and its rival, Lyft, be subject to the same rules that apply to other companies offering transport in the Texan state capital.
Kitchen, who represents the 80,000 people of district 5 in South Austin and was a barely-known local political figure in the city, now finds herself the target of a sophisticated, well-funded, and highly-personalized political operation.
She is facing a recall election campaign, the rare procedure through which elected officials can be booted from office. If it succeeds, she will be the first city official to be recalled in the city’s history.
“It’s brutal, and I don’t understand it,” she said. “I want to work with Uber. I’m not trying to ban them.”
Kitchen, who used to work as a social worker, does not fit a stereotype of a ragged, political bruiser.
During a recent interview at her City Hall office decorated with her mother’s paintings, she arrived in a blazer, wearing a city seal as a necklace. “A pin is fine but what woman doesn’t love a necklace?” she said, in a faint Texan drawl.
A longtime advocate for affordable housing and expanded medical coverage, she had been an expert in transport issues, never taken an Uber ride, and never thought much about the service. That changed in January 2015, when Austin’s newly-elected city council convened, and its mayor, Steve Adler, assigned Kitchen to chair the mobility committee, a team with jurisdiction over transport in the state capital.
Kitchen holds up the seal of Austin that she wears around her neck every day: ‘I want to work with Uber. I’m not trying to ban them.’ Photograph: Lizzie Chen for the Guardian
Kitchen and her committee drew up a spreadsheet. It contained all of the city’s private transportation services, from common taxis to the pedal-powered rickshaws or bike taxis (also known as pedicabs) to the quaint, horse-drawn carriages beloved by tourists.
They all had to abide by the same ordinances: drivers were fingerprinted, vehicles were required to pull over to the side of the road to pick-up passengers, and companies had to be identified with some form of official marker. To Kitchen, it seemed logical that Uber and Lyft would be subject to the same rules in the name of passenger safety.
“We had an unfortunate incident – a young woman coming out of one of our festivals called an Uber driver and got in the wrong car, and she was sexually assaulted, so we want to prevent that,” she said.
Kitchen was conscious that these rules should not be too burdensome. The official marker for transport providers, she said, could be rudimentary. “Just a sticker would be enough identification,” Kitchen said.
She drew up regulations to ensure the rules would be fairly applied across all transport providers. She had the backing of the mayor, the committee, and other council members.
“We thought we were done at that point,” Kitchen said, laughing.
Things get personal
Few of the technology enthusiasts streaming into Austin on Thursday for the annual South by Southwest (SXSW) festival will have heard of Kitchen – or the controversy she has stoked in the liberal Texan enclave.
Uber users who logged onto the app in Austin were informed there was an option called 'Kitchen’s Horse and Buggy'
Had the SXSW hordes arrived in the city back in November, when Kitchen and her team’s regulation was working its way through the city’s bureaucracy, they would have found it hard to escape the local politician’s name.
In a remarkable example of the lengths Uber is willing to go in order to crush its political opponents – however small – the company redesigned its app to broadcast a stinging piece of political sloganeering against the councilwoman.
One day in early November, Uber users who logged onto the app in Austin were informed that, in addition to a fleet of on-demand Priuses and Chevrolets available at the tap of a button, there was also an option called “Kitchen’s Horse and Buggy”.
For a flat rate of $50, they could order the city’s most antiquated form of transport, the horse-drawn carriages, named after Uber’s political opponent.
The point of the not-so-subtle gimmick was hammered home in a press release from Uber’s Texas division.
“Austinites looking to Uber around town today will get a glimpse of what life could be like if the Austin City Council adopts Council Member Ann Kitchen’s ridesharing regulations,” it said, claiming the rules would prevent the company from operating in the city. “Council Member Kitchen’s plan would impose 19th century regulations on 21st Century technology.”
This was not the first time Uber had used its app to attack a political opponent.
Months earlier, when New York’s Mayor Bill de Blasio floated the possibility of restricting Uber’s expansion, the company’s enormous (and ultimately successful) lobbying effort included a similar tweak to its app, offering users a “de Blasio Uber” option, with a 25 minute wait time.
But that was de Blasio, mayor of America’s largest city. The “Kitchen’s Horse and Buggy” option offered to Austin users was an attack on the low-profile city representative of one corner of Austin. “At first it was funny. It was just ludicrous,” Kitchen recalled. “Then it wasn’t.”
She added: “These guys out in Silicon Valley like to consider themselves disrupters, but they’re just another version of what we’ve had before: big business [types] who think they can write their own laws.”
For its part, Uber defended targeting Kitchen. “Ann is the chair of the mobility committee that introduced this ordinance,” Uber spokesperson Jennifer Mullin said. “If you’ve seen the regulations, you see they’re clearly written for the incumbent industry.”
In December, a month after Uber’s redesigned app was rolled out in Austin, Kitchen’s regulations were finally approved. It was a significant victory for the councilwoman, but it was short-lived.
Uber and Lyft swiftly created and funded a political action committee, or PAC, called RideSharing Works to overturn Austin’s new ride-sharing regulations. The aim was to secure enough signatures to win a special referendum to put the council’s regulations to a city-wide vote, and then defeat Kitchen’s plan.
“Look, it’s the state capital of the second most populous state in the union,” a Lyft spokesman who works for RideSharing Works, Reed Galen, added. “It’s an important city for us.”
Uber gave $18,111 in in-kind contributions and pledged $10,000 to help pay for a fleet of canvassers to collect signatures on the street. Lyft gave $8,730 in-kind and also pledged $10,000. Within three weeks, the campaign claims it garnered 65,000 signatures (triple the number they needed).
Uber employees in Austin, Texas. ‘Regulations are clearly written for the incumbent industry,’ says a company spokesperson. Photograph: Uber Newsroom
An attempt at compromise
From city hall, it was clear that while Kitchen had won a battle by getting the legislation passed, but she was on course to lose the wider war, potentially at great personal cost. The combined force of Uber, Lyft, and a slew of PACs was, most observers agreed, likely going to overturn the city’s regulations in the citywide referendum in May.
In what looked like an attempt to salvage a compromise, Adler, the mayor, tried to introduce a voluntary scheme under which Uber and Lyft drivers would be incentivized, rather than compelled, to submit their fingerprints.
Adler and Kitchen argue fingerprinting is a key issue because it enables the city’s most robust background check, which cross references against FBI records. They believe a slew of serious sexual assaults by on-demand drivers in Austin underscore the need to improve screening.
And there is precedent. In a rare example of city authorities laying down the law for ride-hailing companies, Houston successfully implemented finger-printing background checks after an Uber user was raped by a driver in the city. Uber begrudgingly relented to the new rules, whereas Lyft abandoned the city in protest.
Under Adler’s new plan, sharing economy service providers – initially Uber and Lyft drivers, but potentially Airbnb hosts too – would earn “badges” if they submitted to fingerprinting background checks, entitling them to special privileges.
It was intended as a business-friendly fix. Uber and Lyft drivers, Adler said, would get access to lucrative pick-up points if they submitted to the enhanced vetting procedures, paid for by the city. The mayor’s scheme, dubbed Thumbs up!, won the backing of the city council in January.
But it is toothless without the support of Uber and Lyft, both of which remain opposed to the arrangement, arguing it would create a two-tier system of drivers and discriminate against those who do not submit to the time-consuming process of background checks.
That means Kitchen’s regulations for universal, compulsory checks, and parity for all of the city’s private transport providers will (by most accounts) be defeated in May.
Then came the recall effort
But the councilwoman is not just expected to lose her regulations. She could lose her job, too. Neither Uber nor Lyft appear directly responsible for the effort to recall Kitchen.
But the attack on the councilwoman, stoked by Uber and its “Kitchen’s Horse and Buggy” initiative, has put her in the crosshairs of allied political operations that now want to see her removed from post. And Uber did not dispute that it precipitated the recall movement.
Mullin, the Uber spokesperson, did not dispute the assertion that the company galvanized the effort that has now led to moves to oust Kitchen. “A lot of people in Austin use Uber,” she said.
Few doubt that Kania and Moreland will trigger the recall election, probably in time for a vote in November
“Since when can’t adults decide how they’d like to travel?” said Justin Arman, executive director of conservative PAC Texans for Accountable Government, who is helping organize against Kitchen, whom he called “a threat to the social and economic freedoms that create local prosperity”.
“These regulations really infantilize the good people of Austin,” he added. “There’s no such thing as zero risk, and according to Kitchen’s logic, everyone should be fingerprinted – and hey, why not even chipped? – before leaving the house.”
The recall effort has been coordinated by another right-wing PAC, Austin4All, which seeks to defend the corporate interests of ride-sharing apps.
It is led by Rachel Kania, 28, and Tori Moreland, 25, who raised $46,000 for the Kitchen recall campaign, close to half of it from Joe Liemandt, billionaire CEO of the software firm Trilogy.
The pair quickly secured 7,000 signatures, exceeding the tally needed to instigate recall procedures against Kitchen.
The city has hit back, saying the signatures are invalid on a technicality. But few doubt that Kania and Moreland will, in the end, trigger the recall election, probably in time for a vote in November.
Local media describes Kania and Moreland as a mysterious pair who are hard to reach. (One enterprising reporter from the Austin Monitor was denied entry at their launch event but got into a nearby building so he could take photos from above.)
Both are experienced Republican operatives. Kania is a former senior field and tech strategist for the Kentucky senator Rand Paul’s presidential campaign. Moreland worked for a consulting firm doing data analytics for Ted Cruz’s campaign for the White House.
Over margaritas at an outdoor Austin bar, Kania and Moreland told the Guardian that they tended not to speak to reporters because they had a singular focus. “Getting at the root of the problem,” Moreland said. “Ann Kitchen.”
Rachel Kania and Tori Moreland, co-directors of the PAC Austin4All: ‘We’re getting at the root of the problem.’ Photograph: Lizzie Chen for the Guardian
Katia added: “Ann’s the definition of a really well entrenched politician who’s been bought by special interest. She’s self serving. There’s something bigger at play here.”
As evidence, Kania pointed to the $4,000 worth of campaign contributionsKitchen has received from taxi drivers and lobbyists. “She’s absolutely corrupt,” she said.
They insisted that their political campaigning against Kitchen was separate from the anti-regulation efforts funded by the Uber and Lyft funded PAC, even if their causes were aligned. The fact that some canvassers happened to be doubling-up and collecting signatures for both initiatives at the same time was serendipitous, they added, but “not coordinated”.
Kania and Moreland were undeterred by the possibility the signatures they collected demanding for the recall election may be invalid, which may require they fund a second round of canvassing. “They think we’re going to give up or something,” Kania said. “We’re just getting started.”Tags: UberRegulationsDrivers
Kroger, UPS challenge Central States reduction plan
Kroger participants want out of plan; UPS says proposal illegal
BY HAZEL BRADFORD AND ROB KOZLOWSKI |
MAY 2, 2016
A pending plan to cut benefits to members as part of a rescue plan for the Teamsters Central States, Southeast & Southwest Areas Pension Fund, Rosemont, Ill., is facing challenges even before the U.S. Treasury Department acts on the fund's application.
Current and former plan participants of Kroger Co., Cincinnati, last week sued the $17.8 billion Teamsters Central States over the rescue plan. And United Parcel Service Inc., a former participating employer, challenged the legality of the rescue plan, which would enable the fund to reduce benefits, including those of current retirees.
The Treasury Department is expected to rule early this month on the rescue plan.
Current and former Kroger participants sued Central States April 25 because the participants want to leave the plan and start a new one before the Treasury Department acts on the pension fund's benefit reduction proposal.
UPS, Atlanta, argued in an April 28 earnings presentation that the benefit reduction application by the Teamsters Central States is not legal.
The Kroger case plaintiffs, current and retired warehouse workers for Kroger Co., filed a complaint in U.S. District Court in Chicago, arguing that Central States trustees' refusing to consider an additional plan is a breach of fiduciary duty because it harms participants.
The Teamsters union negotiated a proposal to remove Kroger participants from Central States and create a new plan for Kroger employees, with the company agreeing to absorb the increased withdrawal liability, according to the federal court complaint.
Because Central States trustees “flatly refused to consider” after deliberating for just five days, the plaintiffs are asking the court to order reconsideration of the proposal, to appoint an independent fiduciary to judge the idea and to negotiate an arrangement with Kroger.
If that doesn't happen before the existing proposal expires June 15, “the Kroger participants will be trapped in a plan that is about to cut their benefits and still faces likely insolvency,” the court complaint said.
Thomas Nyhan, executive director and general counsel at the Central States pension fund, said in an e-mailed statement that the claims by Kroger and the Teamsters union “are without merit. As fiduciaries, Central States' trustees have a duty to safeguard the retirement benefits of all of our 407,000 participants — not a select few from a particular employer. Central States is prepared to defend against this complaint, and we are confident that Central States will prevail by demonstrating that the trustees' actions are consistent with their fiduciary duties.”
UPS, which in 2007 withdrew from the Central States pension fund as part of a collective bargaining agreement with the International Brotherhood of Teamsters, might be required to pay $3.2 billion to $3.8 billion in benefit payments if the pending benefit reduction application is approved by the Treasury Department.
A “backstop agreement” in the 2007 bargaining agreement stated that in the event “at some point in the future if Central States ever lawfully cut benefits to that group, UPS would provide a supplemental retiree benefit” only to its participants, UPS spokesman Steve Gaut said in a telephone interview.
The Kline-Miller Multiemployer Pension Reform Act of 2014 requires the Treasury Department to approve an application if a pension fund's potential claims would cost the Pension Benefit Guaranty Corp. $1 billion or more. The Central States pension fund applied for the rescue plan in September with the Treasury Department. The pension fund is projected to become insolvent in 2025.
The Treasury Department's decision is expected on or before May 7.
Mr. Gaut said UPS also believes the benefit reductions laid out in the application are not legal. The MPRA imposed a tiered benefit reduction process specifically for the Central States plan. UPS argues that the benefit reduction application disproportionally affects participants in the third tier, which comprises the UPS participants.
“The ordering rule that's laid out in the (act) would indicate that there should be a progressive reduction of benefits starting at Tier I, then moving to Tier II then moving to Tier III,” Mr. Gaut said.
According to UPS, the average benefit reduction for Tier III participants is 53%, compared to 34% for Tier I participants and 29% for Tier II participants.
According to a January paper from the Congressional Research Service, Tier I includes benefits for participants that worked for employers that withdrew from the Central States fund without making the payments required to fully exit the plan and Tier III consists of the benefits for the UPS participants. Tier II consists of participants not in either other group. There are 100,377 Tier I participants, 322,560 Tier II participants, and 48,249 Tier III participants. n
This article originally appeared in the May 2, 2016 print issue as, "Kroger, UPS sue over Central States reduction plan".Tags: PensionsupsIBT