One of the world’s largest trucking companies, XPO Logistics, on Tuesday agreed to pay $ 30 million to settle class actions brought by hundreds of drivers who said they earn less than minimum wage by delivering goods to major Port of Los Angeles and Long Beach retailers. .
The combined settlements, approved by U.S. District Judge R. Gary Klausner, dealt with allegations that two subsidiaries of XPO, XPO logistics trolley in Commerce and San Diego and XPO Port Service in Rancho Dominguez, paid drivers wages below the legal wage, failed to pay them for missed meals and rest periods, and failed to reimburse them for work expenses or wait time penalties.
The settlements were a major victory for the International Brotherhood of Teamsters, which applauded the lawsuits as part of a decades-long effort to organize more than 25,000 drivers from the twin ports.
Trucking companies classify many of their drivers as independent contractors, making them ineligible for a host of labor protections, including the ability to collectively bargain wages.
In recent years, the California labor commissioner has awarded more than $ 50 million to some 500 truckers who have claimed they were denied pay due to misclassification as contractors rather than employees. At the same time, many truckers gave up working as employees, preferring to own and drive their own vehicles.
But as the pandemic has brought grunts down the supply chain, port drivers have expressed growing frustration with lost income as they wait in the queues for hours at ports – time for which they would be compensated if they were employees.
The agreements do not oblige XPO to reclassify its drivers as employees, but union leaders have nonetheless welcomed the agreements, which will compensate 784 drivers, as a turning point in the fight for port dummying. The settlements are preliminary, but individual drivers could receive up to $ 100,000, depending on how long they work for the company.
“Misclassification of workers is all too common at ports,” Ron Herrera, president of the Los Angeles County Federation of Labor, said in a statement. “Although XPO is notorious, there are far too many employers who continue to deprive workers of their wages and the rights they deserve.”
A spokesperson for the company’s headquarters in Greenwich, Connecticut declined to give details of XPO’s decision beyond an official statement: “With the changing legal and regulatory landscape in California, we have reached an agreement on terms favorable to XPO and should put this issue aside. we.”
The reference to California’s “legal and regulatory landscape” alluded to a 2018 law, Senate Bill 1402, which makes customers of logistics companies – including large retailers such as Amazon, Walmart, Target, Apple, Ikea and Toyota – jointly liable for wage violations if their contractors fail to meet final judgments.
This law was further strengthened last month when Gov. Gavin Newsom signed Senate Bill 338, which triggers joint liability for retailers who hire logistics companies for repeated infractions, regardless of whether a judgment is met or not.
“California Port’s dally drivers are the last remaining American sharecroppers, detained in debt bondage and working dangerously long hours for minimal pay,” the Legislature said in the preamble to the new law.
Independent contractors lease trucks to companies but “can be terminated at any time and lose the money they thought they were paying for the truck. Businesses deduct money from drivers’ pay checks for business expenses that lead to poverty wages, ”the Legislature said.
The XPO regulations follow setbacks for the California trucking industry, which sought to be exempt from Assembly Bill 5, a broad law that followed a 2018 California Supreme Court ruling setting out strict conditions on the classification of workers as independent contractors.
The United States Supreme Court this month refused to support petition from a trucking company arguing that AB 5 is preempted by federal rules governing working conditions for truckers. The Federal Aviation Administration Authorization Act prohibits states from enacting laws dictating the prices, routes, and services offered by motor carriers.
Cal Cartage Transportation Express, which brought the lawsuit, has been locked in a dispute with the city of Los Angeles over its classification of workers as contractors rather than employees.
Another case brought by the California Trucking Assn. against AB 5 has not yet been resolved. A spokesperson for the association declined to comment on the XPO regulations.
The Supreme Court ruling and new laws affecting port daking show “that it is clear that it will be increasingly difficult for trucking companies to continue to flout our laws – and more difficult for their retail customers to continue to flout our laws. close your eyes, ”said Jessica Durrum, director of the ports and freight campaign at the Los Angeles Alliance for a New Economy, a labor-affiliated non-profit organization.
With $ 16.25 billion in sales in 2020 and more than 100,000 employees in 30 countries, XPO is the second largest logistics provider and freight broker in the world. The company is under pressure from American and international unions to improve conditions for its workforce.
A 2020 Teamsters report with working groups in nine European countries, “XPO at the service of injustice”, accused the company of negligence in exposing workers to COVID-19 during deadly outbreaks at its facilities, as well as pay theft, gender discrimination, sexual harassment and extreme anti-union tactics.
XPO spokesman Joseph Checkler said the report’s allegations “are completely inaccurate and have been fully debunked. These union-affiliated groups continue to disseminate false information to advance their financial agenda. “