"Independent Contractor" Drivers Employed by XPO Logistics Ruled Misclassified by CA Labor Commissioner, Awarded Nearly $1 Million; Drivers' Fight for Employee Rights Continues as Company Refuses to Reclassify Drivers

PORT OF LOS ANGELES, Calif. and LONG BEACH, Calif., April 20, 2017 /PRNewswire-USNewswire/ -- On Friday, April 14, 2017, the California Labor Commissioner issued Orders, Decisions, and Awards (ODA's) in the amount of $855,285.62 to four (4) port and rail drivers working for XPO Logistics' (NYSE: XPO) subsidiary XPO Cartage (average ODA: $213,821 per driver). These drivers – like hundreds of others at XPO and other harbor trucking companies – filed Wage & Hour claims with the California Division of Labor Standards Enforcement (DLSE) alleging misclassification as independent contractors. They join more than 300 misclassified port drivers for whom the Labor Commissioner's office has issued determinations of misclassification. These four XPO drivers, like the majority of those who have filed claims, remain misclassified by their employer and are continuing their fight for justice. (See list of XPO drayage litigation below.)

The ODAs included, for the first time, awards for "nonproductive time," such as time spent inspecting the truck, waiting for dispatch, or scanning in paperwork at the end of the day. Each of the four XPO drivers were awarded an average of $38,000 in wages for unpaid hours, plus liquidated damages for the same amount, amounting to approximately $76,000 each (in addition to expenses, deductions, meal and rest breaks, and interest). The awards for "nonproductive time" were pursuant to California Assembly Bill 1513 passed in 2016, which requires employers to pay employees paid piece rate for nonproductive time.

XPO driver Jose Herrera, who has driven for XPO (or its predecessor Pacer Cartage) for eight (8) years, was awarded $279,415.83 for illegal deductions. On Wednesday, Herrera spoke on a webinar organized by the Committee on Workers' Capital (CWC) to provide XPO investors with critical information about the poor environmental and social record at the company, and to present the case for XPO investors to support a shareholder proposal at the company's upcoming Annual General Meeting on May 10, 2017. The shareholder proposal calls upon XPO Logistics to disclose its sustainability policies and practices annually to assure that XPO stakeholders are aware of the company's human capital management risks and challenges, as well as the company's exposure to climate risk in much of its global operations. [Watch the webinar here]

"XPO controls every aspect of my work," Jose Herrera told investors on the call. "XPO has the customer relationships, not me. The company tells me where to go and when to go there. The truck I drive has XPO clearly marked on the outside and I'm not allowed to take that truck to any other company if work is slow at XPO. Even though they are clearly in control of my work, XPO refuses to give me the same rights as their employee drivers in other divisions. That means that I have no worker's compensation if I get injured on the job or disability insurance if something happens to me. And that's not all – XPO deducts their business expenses from our paychecks, like truck maintenance, repairs, and fuel. They charge us for everything and the government has confirmed what I've always known: It is illegal. That's why my co-workers and I have been fighting, suing, and striking."

Herrera further stated, "The Labor Commissioner's ruling in our favor is only a partial victory. My co-workers and I won't stop fighting until XPO recognizes our employee rights and stops misclassifying us as independent contractors."  Click here for a photo of Jose Herrera. Photo credit: Justice for Port Drivers.

XPO has appealed prior ODAs awarded by the DLSE and the courts have consistently upheld the CA Labor Commissioner's rulings that the drivers are employees. Additionally, in Los Angeles Superior Court, the ruling denying XPO's petition to compel these four recent drivers' cases to arbitration was based in part on finding sufficient evidence that the drivers were employees, not independent contractors (appeal pending).

Since 2011, port truck drivers serving America's largest port complex have filed more than 800 claims with the California Division of Labor Standards Enforcement (DLSE), which adjudicates wage claims and is an enforcement branch under the California Labor Commissioner's Office. The DLSE has issued determinations in about 300 cases, finding that drivers were, in fact, employees.

In total, these decisions awarded over $36 million in stolen wages and penalties. There are about another 200 pending claims that are still awaiting hearings. (The other 300 or so cases were presumably either settled prior to hearing or were transferred to the courts). Port drivers continue to regularly file new claims. These new ODAs for XPO drivers are well above the prior average award of approximately $116,000, covering the prior three years of employment. The award amounts are so high because in California it is illegal to deduct business expenses such as the cost of fuel, insurance, lease payments etc. from employees' wages, as companies who misclassify drivers often do.

Drivers have also fought for – and consistently won – other employee rights, including workers' compensation and disability benefits. Specifically, the California Employment Development Department (EDD) has found in at least five separate investigations that XPO Logistics drivers (four drivers from XPO Cartage and one from XPO Port Services) were employees – not independent contractors – and therefore have a right to state disability and unemployment insurance.

"No one should have to fight for benefits that are rightly theirs," said Eric Tate, Secretary-Treasurer of Long Beach-based Teamsters Local 848. "The evidence is unequivocal – these drivers are employees and companies like XPO must respect their rights and follow the law, or the cities of Los Angeles and Long Beach should ban them from doing business at the ports they oversee."

Background

XPO Logistics (XPO) is a publicly traded company whose subsidiaries XPO Cartage (f/k/a Pacer Cartage) and XPO Port Services, Inc. d/b/a XPO Logistics (f/k/a Intermodal Container Service, dba Harbor Rail Transport) are together among the top trucking companies servicing the Ports of Los Angeles and Long Beach. XPO Logistics specializes in moving goods to and from the ports, while XPO Cartage primarily moves goods to and from nearby intermodal rail yards. There are approximately 280 alleged misclassified drivers working for both companies in their LA-area locations and 90 additional drivers in XPO Cartage's San Diego facility.

Intermodal Drayage (Port/Rail Trucking) Classification Claims

Labor Commissioner Claims

• In March 2014, the California Division of Labor Standards Enforcement (DLSE) San Diego office issued findings in the wage claims of seven individual Pacer Cartage, Inc. (currently known as XPO Cartage) drivers, all of whom it found to be employees who had been illegally misclassified as independent contractors. The DLSE awarded these drivers a combined $2.1 million. Pacer appealed these seven awards to the California Superior Court, San Diego, and in September 2015, the court upheld the DLSE's decision. XPO has appealed the court decision (fourth Appellate District, Div. 1, D069425) and the case remains pending.
• In 2015, the Long Beach DLSE office determined that Pacer Cartage, (currently known as XPO Cartage) had misclassified another five drivers, and awarded them a total of $950,000 in unlawful deductions, reimbursable expenses, and penalties. XPO has appealed the Labor Commissioner's decisions and the cases remains pending in court.
• In 2017, the Long Beach DLSE office determined that XPO Cartage has misclassified another four drivers, and awarded them a total of $855,285 in unlawful deductions, reimbursable expenses, and penalties.

Private Litigation

• Class Actions:
• Molina v. Pacer: XPO Cartage, then Pacer Cartage, is facing a class action lawsuit involving over 600 drivers and the estimated liability amounts to over $5 million. Pacer and the class representative's attorney, Kabateck, have reached a tentative agreement to settle this litigation. However, court approval and acceptance of the settlement by a minimum percentage of members of the purported class remain pending. The settlement offer does not discuss the reclassification of employees. Some drivers have signed a petition and have sent it to the court to request that the judge reject the proposed settlement.
• Arevalo v. XPO Port Services, Inc., d/b/a XPO Logistics (f/k/a Intermodal Container Services, d/b/a Harbor Rail Transport): This is a class action lawsuit, involving 100 drivers, alleging XPO Port Services' willful misclassification of employees, failure to pay wages, pay overtime, and provide meal and rest breaks to its employee drivers. Filed in August 2015, this lawsuit is in the beginning stages and no major event has taken place yet.
• Lopez v. Pacer Cartage, Intermodal Container Services d/b/a Harbor Rail Transport, and now defunct PDS Transportation: In January 2016, Kabateck, the same firm that filed the class action against Pacer Cartage, filed a new class action lawsuit against all XPO's intermodal subsidiaries.
• Mass Actions: In 2014, a total of 202 drivers filed individual complaints in three separate "mass action" lawsuits against their respective companies—HRT, Pacer Cartage, and the now-defunct former XPO subsidiary PDS Trucking—for wage and hour violations arising due to misclassification as "independent contractors." All cases are still pending.

National Labor Relations Board

XPO's misclassified "independent contractor" drivers have filed multiple Unfair Labor Practice charges alleging violation of their rights as employees under the National Labor Relations Act (NLRA) for protected concerted union activity. Upon investigation, Region 21 of the National Labor Relations Board determined that (a) these drivers are misclassified as independent contractors and thus protected by the NLRA, and (b) there is merit to their Unfair Labor Practice charges. For XPO's Cartage division, a trial in front of an Administrative Judge has been scheduled to begin on July 24, 2017; for XPO's Port Services division, the trial is scheduled to begin on Oct. 16, 2017.

Social Media Links

• For more information on the port truck drivers' campaign, visit www.JusticeForPortDrivers.org.
• Like us at www.facebook.com/Justice4PortDrivers and
• Follow us on Twitter @PortDriverUnion

PRESS CONTACT: Barb Maynard, (323) 351-9321; [email protected] 

SOURCE Teamsters Port Division