Naples Daily News: Los Angeles sues three major port trucking companies for ‘disgraceful exploitation’ of workers
by Brett Murphy, USA TODAY Network | Jan. 8, 2018
The city of Los Angeles filed three lawsuits against some of the busiest port trucking companies in the country Monday, demanding they stop systematically exploiting their workers in the wake of reports by the USA TODAY Network.
“This abuse, this disgraceful exploitation has to stop,” City Attorney Mike Feuer said at a news conference Monday, citing the Network’s “scathing” coverage of the industry.
Feuer alleged CMI Transportation, K&R Transportation and California Cartage Transportation Express represent industry leaders that knowingly violate state labor laws with “devastating practices” meant to increase executives’ bottom lines while driving their workers into debt.
“We’re trying to create systemic change, and we’ll continue to investigate other companies as well,” Feuer said.
The three companies are part of the California Cartage family of outfits recently bought by New Jersey-based NFI Industries. Those companies helped spearhead the lease-to-own contracts that became pervasive across the industry.
“Denying workers fair wages and benefits to pad profit margins is unacceptable,” Los Angeles Mayor Eric Garcetti said in a statement. “We will not stand for it in Los Angeles.”
The lawsuit seeks penalties, restitution and a prohibition against practices that lead to worker exploitation, according to the complaints.
Representatives at NFI and California Cartage did not immediately respond to requests for comment Monday about the suits filed in Los Angeles County Superior Court.
“I would question the standing or merit of this lawsuit, but that is for the courts to decide,” said Weston LaBar, chief executive officer of the Harbor Trucking Association, who called the state’s history of judgments in favor of port truckers “completely one-sided.”
“This most recent effort by the city attorney does nothing more than validate that in my mind,” LeBar said.
The USA TODAY Network previously reported that more than 1,100 California port truck drivers have filed labor complaints in civil court and with the state labor commissioner since 2008. That year a new California environmental law required trucking companies serving state ports to replace old trucks with new, cleaner rigs.
To avoid the cost, many companies pushed their independent drivers into lease-to-own contracts that they didn’t understand and could not afford.
When drivers got sick or fell behind on payments, trucking companies fired them, seizing their trucks and tens of thousands of dollars they had paid toward buying them.
Monday’s legal action is the latest in a wave of changes affecting the port trucking industry in recent months following the USA TODAY Network’s coverage.
Since the network began reporting last spring drivers have filed 23 new California Labor Commissioner cases and six lawsuits, including three class actions, against port trucking companies.
Trucking companies exposed in the network’s reporting have lost business. At least one executive resigned. State and federal agencies have launched investigations into potential worker exploitation and forced labor, and lawmakers have introduced sweeping national and state reforms to curb systematic labor abuse in the industry.
“The revelations about the abuse of workers in the port trucking industry should outrage every American,” Sen. Bernie Sanders, I-Vt., wrote in a November letter to President Donald Trump, calling for an executive order to investigate port trucking companies and ban government agencies from contracting with them. “It is time for us to end this exploitation.”
Sanders is one of several high-profile lawmakers, including Democratic Sens. Sherrod Brown, of Ohio, Dianne Feinstein and Kamala Harris, of California, and Elizabeth Warren, of Massachusetts, who have launched public pressure campaigns to reform the industry.
In August they sent letters to 16 retailers and manufacturers named in the network’s reports, demanding independent investigations and answers.
“Port trucking companies’ brazen disregard for federal transportation safety standards and workers’ safety and rights is shameful,” wrote the senators, led by Brown.
As a result, manufacturers, shippers and at least six major retailers — including Target, Home Depot and Walmart — launched internal audits of their supply chain to ferret out port trucking companies with labor violations. So far two, including Costco, have cut ties with their trucking companies.
Pacific 9, one of the biggest trucking companies at the port, changed its business model, dropping the lease-to-own program and rehiring dozens of independent drivers as protected employees.
Weeks after one of the network’s reports, the president of Fargo Trucking resigned, its board filed for bankruptcy, and the company lost one of its biggest clients, international steamship giant OOCL, after receiving “tremendous pressure” to minimize “exposure” from the articles, according to an email sent to the trucking company’s executives.
In July, House members on the Transportation and Infrastructure Committee, led by Rep. Peter DeFazio, D-Ore., demanded more oversight from the Department of Transportation, which pledged to investigate the allegations of abuse.
Citing the network’s coverage, DeFazio and nine others in Congress introduced two bills, including the Port Drivers Bill of Rights, and other legislation to grant local governments more power to regulate port trucking companies.
Local and state lawmakers also have taken action.
Last year California Democrats signed a unanimous resolution calling on the mayors in Los Angeles and Long Beach to end the “sweatshop working conditions” in the harbor.
Los Angeles Councilman Joe Buscaino, who has led Los Angeles City Council hearings on the issue, praised the city attorney’s decision to sue port trucking companies.
“No company is allowed to gain an unfair advantage by exploiting human beings for the sake of corporate profits,” Buscaino said in a statement.
After a November special hearing that attracted more than 200 people, the Los Angeles council approved a plan for a city report on the financial possibility of banning companies that violate labor laws and an industrywide audit of lease-to-own contracts.
The city’s Bureau of Contract Administration has since opened three investigations against port trucking companies.
Council members also told the city attorney to look into mandating basic work standards and fair pay for workers at companies that operate on city property.
“I remain haunted by the testimony,” Councilman Mike Bonin said after hearing port truckers speak about their experience. “It’s as close to modern-day sharecropping as I’ve heard in my time in office.”