Notes From the Underground Economy

Are companies at the Port of Long Beach cheating truckers out of their rightful wages?

"I once asked Shippers if I could take the truck somewhere else to work, and they said no," he says. "There comes a time at work where you haven't been appreciated or properly compensated, and you're being humiliated."

*     *     *

Trucking companies have standard responses for the claims Meyers and others make. Drivers sign a contract that spells everything out. Companies lease workers an expensive truck, usually valued in the six figures. Not bringing home enough money because of a tremendous amount of overhead is a common struggle among small businesses. If truckers are not prepared for these issues, then wouldn't it make sense for them to try another profession or find a job somewhere else?

"We have a problem when companies are harassed or targeted unjustifiably simply because they use independent contractors," California Trucking Association vice president Michael Shaw told the Los Angeles Business Journal in October 2012. In that article, Shaw and others in the trucking industry claimed that "regulators are investigating on behalf of the Teamsters' union." Many truckers say they believe the trucking companies treat them as though they are not free to make independent decisions that any small business can make. "These guys came in looking to lease a truck, and they knew what we offered," Shippers' general manager Kevin Baddeley is quoted as saying. "If they wanted a job with benefits, working eight hours a day, they should have applied for a job."

But there are next-to-no full-time trucking jobs left at the port. The roots of this debate date back 30 years, when then-President Ronald Reagan deregulated the port-trucking industry. Many of the truckers who were unionized were forced out by the competition, and new companies were allowed to move into the port and operate at lower costs by using independent contractors. It became a cutthroat industry, but one in which independent contractors could still achieve a lower-middle-class salary. Then, in January 2012, the port banned all trucks that didn't meet the Federal Clean Truck Emissions Standards as part of the Clean Truck Program—a process that had been staggered since 2009. Thousands of independent truckers with their own vehicles who couldn't afford new ones or modifications to their old trucks were out of work, placing them at the mercy of trucking companies, who now had a glut of applicants for both full-time employment and independent-contractor status.

Last year, Governor Jerry Brown signed Senate Bill 459, labeled by the trucking industry as the "Job Killer Bill." It prohibits the willful misclassification of independent contractors—a move that identifies the state's recognition of the problem. For each violation, the fine is $5,000 to $15,000; if there is a pattern of practice, then the fine escalates to $20,000 to $25,000 per violation. Plus, the Department of Labor under the Obama administration has beefed up the number of investigators who respond to willful misclassification claims.

The new law seems to have reinvigorated the Teamsters, which has strategized for decades on how to get independent drivers to speak as one voice, to reach out to the trucking community. In August, the Teamsters-backed community/labor coalition Change to Win, along with members of Teamsters Local 848, leafletted at the port about a September meeting, where labor lawyers, members of the Department of Industrial Relations, and Teamsters would be present to tell the troqueros of their rights.

Coral Itzcalli, local spokesperson for Change to Win, dressed in an orange vest, flagged down trucks roaring into the port. "We don't need to tell [the drivers] they're misclassified," she said. "They know it. But what do you do about it?" 

*     *     *

Organizers were on the lookout for company moles, as independent contractors gathered for the September meeting in the Teamsters Local 848 hall off Cherry Avenue in Long Beach. Many of the contractors were apprehensive about attending the meeting, as SB 459 prohibits them from unionizing. Most of the 70 or so truckers present were Latinos; they sat in chairs under large portraits of Martin Luther King Jr., Cesar Chavez and Jimmy Hoffa. The speakers spoke in Spanish and defined for the troqueros terms such as misclassification and the differences between an independent contractor and an employee.

"[The trucking industry] picked the right group of workers—an immigrant group who comes to the United States with the idea of prosperity," says Itzcalli, who was born in South LA. "Everyone comes here looking for the American dream, and [trucking companies] sell them this idea that they're going to own their own business. 'You're going to have your own truck; you're going to work when you want to work—the hours you want. If you work hard, you're going to make a lot of money.'"

After the meeting, truckers were encouraged to present their tax information and pay stubs to try to document whether they are, in fact, employees and not independent contractors. "We know what the companies are doing is illegal," Itzcalli claims. "We know they're misclassified. The drivers have the proof in their check stubs and taxes."

The IRS has been investigating larger businesses for such violations, and the agency has collected a considerable sum of money. "Critics call the practice misclassification, and it's become a top priority for the Labor Department under the Obama administration," according to a recent CBS report. "In 2011, the department collected more than $5 million in back wages on behalf of about 7,800 employees who had been misclassified—a 500 percent increase over the amount collected in 2008. They have hired 300 additional investigators to probe complaints."

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16 comments
Bill7456
Bill7456

 I was leaving work and attempting to go home, but my car would not start.  Mike Fox was walking by and asked what was wrong and I said I guess I have a bad battery. Mr. Fox pulled out his wallet and gave me a hundred dollars. He didn't say I had to pay it back, but said you work hard and are having bad luck, I hope this helps. Mr. Fox didn't have to do that. How many other owners of any company would do that for someone in their company?  Bill

KMA367
KMA367

Cry me a river Pedro. I have NO sympathy for these assholes. They busted the union 30 years ago by scabbing and undercutting the legitimate trucking companies. Now they are cry babying all over the place. They made this mess themselves and now they have to live with  it. The CHP needs to set up a road block on the 710 and impound every single one of their unsafe trucks and revoke each and every one of their illegally obtained Class A CDL - through crooked driving schools and equally crooked DMV employees who issue licenses to these obviously unqualified drivers. Get them and their trucks OFF THE ROAD and put legal, safe trucks on the road along with well paid, honest and competent union men to drive them. 

j.john40
j.john40

YEA THOSE GUYS AT FOX TRANSPORTATION ( MIKE AND BRITTNEY FOX ) ARE REAL CROOKS THEY STEAL FROM EVERYBODY AND TREAT THERE EMPLOYEES LIKE CRAP THEY

fretsward
fretsward

Illegitimate parasites now have the temerity to complain about depressed wages.

You can't even make this up. Mexico, the gift that keeps on giving...

Funkyonion
Funkyonion

Beware deception by Teamsters. Just saying....

They play dirty. It is all a snowball clusterflop. People milk work comp. "Just business" tools employees. Unions follow the money without scruples. Argue any side you want; it's blemished.

carlsbadsurfking
carlsbadsurfking

Yea..its a Bracerro Program...just a ripoff..like so MUCH of the trucking business....Thieves,

Crooks, and Liars.......they call themselves..Executives...and Businessmen...how funny....all over

Los Angeles these port trucks are Smashing into Cars....the Bracerro jumps out and runs away...LOL.

carlsbadsurfking
carlsbadsurfking

Sure the driver doesnt make money unless he hauls ass thru traffic

to get a certain amount of trip done per day....you KNOW he is in a Hurry...and SAFETY is

NOT the first thing on his mind..no MONEY is. Hourly wage is better...from a Safety Standpoint..for the general public....FMCSA is now investigating Brokers and Shipper per CSA Program....This operation should be on the top of the list.

Whophantom
Whophantom

This is tantamount to the "bracero program" where you were paid for how much you picked, not how many hours you worked. I'm surprised Secretary of Labor Hilda Solis didn't get involved with this rip off  by Corporate Money Mongers.

GustavoArellano
GustavoArellano moderator editortopcommenter

@KMA367 Wow, what a bunch of nativist bullshit...you sound just like Samuel Gompers railing against Bohunks, you do!

GustavoArellano
GustavoArellano moderator editortopcommenter

@fretsward This story says NOTHING about illegal immigration, yet moron asses like  you will try to make it such. GUESS WHAT?! ILLEGALS MADE YOUR COMPUTER!!!

KMA367
KMA367

@Funkyonion I'd rather share the road with a bunch of UPS Teamster drivers than these idiots!

KMA367
KMA367

@GustavoArellano @fretsward - Then how come all the unsafe, ghetto drivers are MEXICAN? They may not be "Illegal" but they sure are Mexican and they bring all their ignorant Mexican mentality with them.

fretsward
fretsward

@GustavoArellano

Your boy banter, excuse me, ploy unerringly parallels the antediluvian sacred practice of pseud epigraphy whereas an undistinguished writer (cringe), would hide behind generations of illegitimates of the past, claiming venerable authority for his own innovations and psychobabble. Sort of like claiming that the Southwestern United States were owned by Mexico.

An underground economy and having to use interpreters?

You are the quintessential Rham Dass…

 
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