A port trucking company in California has been ordered to hang a small notice that could become a big deal.
As part of a settlement with the Teamsters that was finalized on Thursday, Pacific 9 Transportation in Carson, Calif., has agreed to hang a posting in the workplace saying workers have the right to form a labor union. The notice is significant because the company's drivers are "independent contractors" who normally wouldn't have such a right as non-employees.
The agreement was brokered by a regional office of the National Labor Relations Board, the federal agency that enforces labor law. In the eyes of the Teamsters, the settlement indicates that officials there may be inclined to view the company's drivers as workers who are eligible to unionize.
"What's notable is the region did an investigation and found that they were employees," said Mike Manley, a Teamsters lawyer involved in the case. "For the Teamsters, it's further confirmation of our argument that the model the port trucking industry uses is a fraud. These aren't independent contractors. They're just classifying them that way so they can shove off their business costs and not pay them what they should be paying them."
The order is a far cry from a settled determination by the labor board, and Pacific 9 Transportation would have plenty more opportunity to argue that the truck drivers are not actually employees. But the settlement nonetheless gives a boost to the drivers and labor activists who are trying to unionize workers in an industry predicated on the independent contractor model.
Pacific 9 did not immediately respond to a request for comment.
Trucking companies these days frequently classify their drivers as independent contractors or "owner-operators," rather than direct employees. While the industry likes to say this arrangement gives drivers freedom and flexibility, it's a convenient way to shift workers and their attendant costs off of a company's books, thereby avoiding payroll taxes, worker compensation and other costs traditionally associated with employees. The designation also makes it difficult if not impossible for such workers to unionize.
"I do feel it's a fraud," said 47-year-old Jose Galindo, a former Pacific 9 driver whose job ended with an injury last year. "As an independent contractor, you should have control over the work. I didn't have any say."
In what's known as an unfair labor practice charge, the Teamsters accused Pacific 9 of unlawfully interrogating pro-union drivers, as well as threatening to shut down in the event the workers did unionize. The labor board's regional office apparently found some merit in the union's allegations, prompting the settlement negotiations. The company does not admit any wrongdoing under the settlement.
Under the agreement, Pacific 9 agrees that it won't "ask you about your support for a union" or "threaten you with closure of the facility or loss of your job if you choose to be represented by or support a union."
The Change to Win labor federation, which includes the Teamsters, has been organizing port truck drivers on both coasts and in the South. Last year, the Teamsters entered into an alliance with D.C. taxi cab drivers who, like the truck drivers, are classified as independent contractors. The cabbies don't pay union dues and can't secure a union contract, but they do receive support from the Teamsters in their dealings with the city.
A report produced by Change to Win and other progressive groups last month estimated that 49,000 of the nation's 75,000 port truck drivers are misclassified as independent contractors. The report noted that drivers in California alone have filed 400 complaints with the state labor department alleging wage theft, stemming from their classification as non-employees. It also estimated that trucking companies dodge more than half a billion dollars annually in workers compensation, unemployment insurance and income tax payments due to the use of contractors.
“Trucking used to be one of the backbones of the blue-collar middle class," Jared Bernstein, a former chief economic adviser to Vice President Joe Biden who's now with the Center on Budget and Policy Priorities, told reporters last month, "but de-unionization, deregulation and misclassification of drivers have turned port trucks into sweatshops on wheels.”