The California trucking mess: It's a lot murkier than it seems

 

Last week we spoke of California's trucking regulations as one factor contributing to the logjam in that state's ports, with dozens of container ships anchored awaiting berths to offload their cargoes.  I've been looking into that, particularly in the light of Aesop's criticism (warning:  NSFW language) of my perspective and that of other contributors.

In an effort to find out more, I started doing Internet searches and looking for other sources.  There's an awful lot of smoke around the issue as interested parties try to put forward their own perspectives while trash-talking those of others;  but it's clear there have been problems for a long time.  Those problems gave rise to recent California legislation that changed the structure of the trucking industry in that state.  They may have changed it for the worse:  but they were an attempt to address long-standing abuses.

One of the most interesting investigations was carried out by USA Today five years ago.  It's well worth reading.  Here's an excerpt.

A yearlong investigation by the USA TODAY Network found that port trucking companies in southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford. Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute.

If a driver quit, the company seized his truck and kept everything he had paid towards owning it.

If drivers missed payments, or if they got sick or became too exhausted to go on, their companies fired them and kept everything. Then they turned around and leased the trucks to someone else.

Drivers who manage to hang on to their jobs sometimes end up owing money to their employers – essentially working for free. Reporters identified seven different companies that have told their employees they owe money at week’s end.

The USA TODAY Network pieced together accounts from more than 300 drivers, listened to hundreds of hours of sworn labor dispute testimony and reviewed contracts that have never been seen by the public.

Using the contracts, submitted as evidence in labor complaints, and shipping manifests, reporters matched the trucking companies with the most labor violations to dozens of retail brands, including Target, Hewlett-Packard, Home Depot, Hasbro, J.Crew, UPS, Goodyear, Costco, Ralph Lauren and more.

Among the findings:

• Trucking companies force drivers to work against their will – up to 20 hours a day – by threatening to take their trucks and keep the money they paid toward buying them. Bosses create a culture of fear by firing drivers, suspending them without pay or reassigning them the lowest-paying routes.
• To keep drivers working, managers at a few companies have physically barred them from going home. More than once, Marvin Figueroa returned from a full day’s work to find the gate to the parking lot locked and a manager ordering drivers back to work. “That was how they forced me to continue working,” he testified in a 2015 labor case. Truckers at two other companies have made similar claims.
• Employers charge not just for truck leases but for a host of other expenses, including hundreds of dollars a month for insurance and diesel fuel. Some charge truckers a parking fee to use the company lot. One company, Fargo Trucking, charged $2 per week for the office toilet paper and other supplies.
• Drivers at many companies say they had no choice but to break federal safety laws that limit truckers to 11 hours on the road each day. Drivers at Pacific 9 Transportation testified that their managers dispatched truckers up to 20 hours a day, then wouldn’t pay them until drivers falsified inspection reports that track hours. Hundreds of California port truckers have gotten into accidents, leading to more than 20 fatalities from 2013 to 2015, according to the USA TODAY Network's analysis of federal crash and port trade data.
• Many drivers thought they were paying into their truck like a mortgage. Instead, when they lost their job, they discovered they also lost their truck, along with everything they’d paid toward it. Eddy Gonzalez took seven days off to care for his dying mother and then bury her. When he came back, his company fired him and kept the truck. For two years, Ho Lee was charged more than $1,600 a month for a truck lease. When he got ill and missed a week of work, he lost the truck and everything he’d paid.
• Retailers could refuse to allow companies with labor violations to truck their goods. Instead they’ve let shipping and logistics contractors hire the lowest bidder, while lobbying on behalf of trucking companies in Sacramento and Washington D.C. Walmart, Target and dozens of other Fortune 500 companies have paid lobbyists up to $12.6 million to fight bills that would have held companies liable or given drivers a minimum wage and other protections that most U.S. workers already enjoy.

This isn’t a case of a few bad trucking companies accused of mistreating a handful of workers.

Since 2010, at least 1,150 port truck drivers have filed claims in civil court or with the California Department of Industrial Relations’ enforcement arm, known as the labor commission.

Judges have sided with drivers in more than 97% of the cases heard, ruling time after time that port truckers in California can’t legally be classified as independent contractors. Instead, they are employees who, by law, must be paid minimum wage and can’t be charged for the equipment they use at work.

There's more at the link.

Those abuses are one of the main reasons why California passed legislation forcing trucking companies to treat owner/operators as employees rather than contractors.  That, in turn, had the unintended consequence of forcing many owner/operators to cease working in California, as they could no longer claim a host of expenses against taxable income for which they'd previously been eligible.  Others, with older trucks, found they couldn't afford to meet new emissions requirements.  For both reasons, many have either left the industry or left the state, taking their trucks with them.

So, it seems the trucking situation in California becomes murkier the deeper one delves into it.  I'm not saying that Sundance was wrong in his assessment of the situation, as reported in my earlier article:  but perhaps he didn't take some factors into account (or insufficiently so).  Clearly, I didn't either.  Thanks, Aesop, for providing the impetus for me to dig a little deeper.

Peter