Activities at the Long Beach Harbor slowed dramatically after the International Brotherhood of Teamsters President James P. Hoffa committed his union’s 1.4 million nationwide membership to supporting “labor action” against Port of Long Beach truckers and warehouse operators for the unfair labor practice of “misclassifying” truck drivers and warehouse workers as independent contractors.
Breitbart News reported last April in “Teamsters Crank Up Labor Strife At LA & Long Beach Ports” that just as West Coast ports were trying to move the huge backlog of freight following nine months of bitter labor strife between the Pacific Maritime Association and members of the International Longshore and Warehouse Union(ILWU), the International Brotherhood of Teamsters organizers began new port labor actions.
About 200 of the 16,000 drivers that haul freight for the 1,000 companies regularly servicing the ports set up picket lines in April around the entrances to the trucking yards for Pacific 9 Transportation, Intermodal Bridge Transport, Pacer Cartage, and Harbor Rail Transport. Teamster spokesperson Barb Maynard told the Los Angeles Times’ that workers are being “robbed of basic workplace protections like the right to minimum wage, overtime pay, and a safe and healthful workplace.”
The Teamsters stated that the main issue driving the strike was their contention that the drivers who work as “independent contractors” for trucking companies should be classified as full-fledged employees. Although the union alleged that independent status is “wage theft,” the real issue appeared to be that contractors cannot legally join the Teamsters’ union and force employers to pay the Teamsters dues and benefits.
Superior Court Judge Jay M. Bloom in January ruled that employees at Pacer Cartage should have been classified as employees. XPO Logistics, which owns Pacer Cartage and Harbor Rail Transport, were ordered to pay $2.2 million in damages because they should not have classified truckers as independent contractors. The judge ordered Pacer to pay the seven drivers named in the suit damages for loss of wages and benefits ranging from $85,632 to $387,936.
Most trucking firms that do business around California ports have been hiring drivers as independent contractors since the state legislature passed new environmental regulations in 2009 that all “drayage” trucks must meet more stringent CO2 emissions requirements. The new trucks cost about $100,000, an amount beyond the financial capability of most independent owner-operators.
Pacer Cartage and other logistics companies at the Long Beach and L.A. ports set up a supposedly independent company that leased the trucks through Bank of America, and then subleased the units to the independent contractors.
The court found that drivers: 1) never saw the terms of the “complex” leases; 2) were required to purchase insurance through the companies; 3) lease agreements were also only available in English, despite the seven plaintiff drivers “spoke virtually no English”; 4) drivers could only park the trucks in designated areas overnight; 5) could not move freight for any other company; and 6) were punished if they received moving violations.
The Teamsters in support of workers classified as independent contractors filed a petition against Chinese-owned trucking company Intermodal Bridge Transport on October 28 to be reclassified as employees and represented by the Teamsters. When company officials refused their demands, the Teamsters called a strike and an unknown number of workers walked off the job. Later that day, the Teamsters announced they entered into a new partnership with the Warehouse Workers Resource Center to support of a warehouse worker’s strike against Cal Cartage.
Breitbart News reported that the strike by International Longshore and Warehouse Union, whose members were already commanding average wages and benefits of about $1,200 a day, against West Coast port employers cost the United States economy about $20 billion. The hardest hit industries were a 20 percent reduction in annual Asian fresh fruit and vegetable exports, $7 billion decline in retail sales, and hundreds of millions in meat and poultry exports.
Multiple labor actions by the International Longshore and Warehouse Union have caused freight carriers and logistics companies to flee West Coast ports. The share of all US container imports going through West Coast ports have steadily declined from a 2000 peak of 50 percent to 43.5 percent in 2013. Of 138 shipping companies polled by the Journal of Commerce in January, 65 percent planned to have less cargo activity through the West Coast in 2015. The Teamsters cranking up labor strife at the Port of Long Beach will only accelerate that trend.