California truckers win $2 million in wage theft suit

Reuters News
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Posted: Jan 30, 2015 10:52 PM

By Steve Gorman

LOS ANGELES (Reuters) - Seven Los Angeles-area truckers have won a $2 million claim against an international shipping company accused of stealing their wages by improperly classifying them as independent contractors and charging them to lease its trucks to drive.

In a decision with implications for hundreds of companies and thousands of truckers in Southern California alone, a San Diego County Superior Court judge held that the seven plaintiffs should have been defined as employees of Pacer Cartage under California's labor law, not as independent owner-operators.

Judge Jay Bloom ruled the seven drivers, who were Hispanic and spoke little English, were entitled to reimbursement for the money California-based Pacer deducted from their wages for the truck leases, insurance, vehicle maintenance, fuel and other out-of-pocket expenses.

That judgment, returned on Wednesday after a 14-day non-jury trial, came to just over $2 million collectively, the same sum previously awarded to the seven truckers by a state labor commissioner and appealed to the court by the company.

Alvin Gomez, the lead plaintiff's attorney, said on Friday the ruling would bolster litigation already brought against several other trucking firms and for additional wage-theft lawsuits he planned to file next week.

"This is a tremendous victory in the fight against misclassification," Gomez said, adding that the ruling had the potential to "forever reshape the United States trucking industry."

He said most California freight hauling companies now operate under the same complex truck-leasing scheme, which the judge ruled violates state labor law.

Pacer, a subsidiary of global shipping company XPO Logistics Inc, plans to appeal the judge's decision, said Troy Cooper, XPO's chief operating officer.

"We believe the drivers in question are properly classified as contractors, and that this case is without merit," he said.

The truckers worked at the twin ports of Los Angeles and Long Beach, the busiest U.S. container cargo hub.

Gomez said misclassification of drivers became more pervasive after a new clean air program went into effect in 2008, barring older, heavier-polluting trucks from the ports.

Many drivers, unable to afford to buy new trucks of their own, were forced to sell their rigs and lease trucks from shipping companies, which also acquired exclusive access to the waterfront under port "concessions" created under the clean-air program.

The truckers were barred from entering the ports to pick up cargo unless driving for an authorized concession. And their lease arrangements effectively locked them in to driving for no more than one company.

(Additional reporting by Curtis Skinner in San Francisco; Editing by Richard Borsuk)