California judge rules COSCO-affiliated port truckers were misclassified

California judge rules COSCO-affiliated port truckers were misclassified

Jennifer McKevitt

Dec. 6, 2017
Dive Brief:

In a driver misclassification case, Judge Dickie Montemayor ruled against Intermodal Bridge Transport (IBT), stating the company violated federal law by engaging in unfair labor practices, including misclassifying its drivers as independent contractors instead of employees, reported.
IBT is a subsidiary of the Chinese-owned COSCO Group. In Montemayor's ruling, the company was also ordered to cease and desist from behavior that includes interrogating, threatening or coercing employees who support union membership at its Wilmington, Calif. terminal.
California truckers have filed more than 800 wage claims, alleging they have been misclassified as independent contractors since 2011, and have been awarded roughly $40 million in compensation across 300 cases as a result.
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Recognition and favorable litigation toward misclassified drivers is growing, with legal tolerance correspondingly shrinking. In Los Angeles, the port of L.A. is considering blocking access to companies relying on contract labor, while companies such as Celadon and Swift have moved to mitigate the risk by turning away from using owner operators in the case of Celadon, or are setting aside large cash reserves should a negative ruling occur in the case of Swift.

Differing legal views of the situation are common.

"By misclassifying the drivers, IBT is preventing the individuals taking concerted activity, and depriving them of rights that employees are entitled to under the National Labor Relations Act," Jordan Schwartz, Partner, Labor and Employment Practice at Conn Maciel Carey LLP told Supply Chain Dive.

In other words, by denying the drivers the right to talk about working conditions or form a union, protections they would otherwise be entitled to, were they not misclassified, have been infringed upon.

Other attorneys attribute at least some of the emerging precedents to location.

"California is all over this issue," David Ritter, Partner at Barnes and Thornburg, LLP told Supply Chain Dive. "They're digging in, because the state and federal government are not receiving their fair share of taxes."

Ritter further notes the specific conditions of the case.

"IBT had full control over the means and the manner of work performed by the drivers," he said. "They established the rules, and when those rules were broken, drivers were disciplined."

"In fact, IBT even tried to cover its tracks by changing some of the contract wording," he added, "which further implicated the company. This is a situation where the black letter of the law is applied: in other words, if it walks like a duck, and quacks like a duck, chances are, it's a duck."