The Los Angeles City Attorney’s office said it has filed lawsuits against three trucking companies alleging the trio engaged in misclassifying truck drivers working for them in order to evade providing protections and benefits to the drivers.
Three separate lawsuits were filed against CMI Transportation, K&R Transportation California and Cal Cartage Transportation Express, based in Wilmington and subsidiaries of California Cartage Co. The parent company was purchased by Cherry Hill, N.J.-based NFI Industries Inc. for an undisclosed amount last fall. The city attorney’s office said that the companies purposely classified their drivers as independent contractors instead of employees.
"We allege these port trucking companies take advantage of hundreds of hard-working drivers, requiring them to pay onerous expenses just to do their jobs, while leaving them without basic benefits and protections - all to boost the companies' profits," Mike Feuer, city attorney said in a statement. "It's wrong, and we're fighting to stop it."
About 10,000 out of 12,000 truckers working at the local ports are independent contractors, according to research by David Bensman, a professor at the School of Management and Labor Relations at Rutgers University in New Brunswick, N.J.
Drivers who are independent contractors have initiated 15 strikes over the past four years regarding misclassification grievances with the most recent action in June. Bensman told the Business Journal last summer that truckers were fighting for employee status to relieve themselves of costs incurred while operating a truck.
As contractors, drivers, and not trucking companies, are responsible for covering basic operational costs such as leases, fuel, repairs, maintenance and insurance. Allegedly misclassifying drivers also allows each company to avoid paying applicable California taxes, instead shifting the cost to the drivers, the city attorney’s office stated in its press release.
The city attorney’s lawsuits seek restitution of any money or property the companies acquired or retained as a result of the alleged business practices, as well as civil penalties of up to $2,500 for each violation, according to the press release. It also urges the companies to reevaluate their business practices.
Manufacturing and trade reporter Shwanika Narayan can be reached at firstname.lastname@example.org or 323-556-8351. Follow her on Twitter @shwanika.