City Attorney Mike Feuer Friday announced a court ruling in favor of Los Angeles in a lawsuit against three of the largest trucking companies operating at the Port of Los Angeles, alleging they improperly classified their employees.
Feuer alleged CMI Transportation LLC, K&R Transportation California LLC and Cal Cartage Transportation Express LLC purposely classified hundreds of truck drivers as “independent contractors” and not “employees” to avoid providing them benefits, paying them minimum wage, paying appropriate state taxes and covering drivers’ operating costs.
“This is a significant step for hundreds of hardworking drivers in and around the port whom we allege are employees, yet are systemically and unlawfully classified as independent contractors,” Feuer said. “The misclassification we allege may boost trucking companies’ bottom lines, but it kicks these drivers in the teeth by requiring them to pay outrageous expenses just to do their jobs. It’s wrong, and that’s why we’re fighting.”
The three trucking companies, according to Feuer, argued in trial court that California’s recently established “ABC Test” for worker classification is preempted by federal trucking regulations.
Feuer said the trial court agreed with the companies’ argument, but Los Angeles appealed to the state’s Second District Court of Appeal, which reversed the trial court decision, stating the ABC law was not preempted by federal law.
The three trucking companies could not be immediately reached by City News Service for comment.
The case now returns to the trial court for an evaluation under California’s ABC Test, the city attorney stated.
In September 2019, California Assembly Bill 5 was codified and expanded a 2018 Supreme Court decision regarding the ABC Test for determining whether a worker is an independent contractor or an employee.
Under the test, a worker is presumed to be an employee unless the company proves that the worker:
— is free from the control and direction of the company in performing work, both practically and in the contractual agreement between the parties;
— performs work that is outside the usual course of the company’s business; and
— is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the company.
Feuer said in the lawsuit that the companies allegedly exert near-complete control over their drivers’ assignments and details of their work. The companies allegedly make assignments, unilaterally set the rates they pay drivers and retain and exercise the right to terminate drivers without cause, all allegedly in defiance of the ABC Test, he said.
The city attorney’s lawsuit seeks to enjoin each of the trucking companies from continuing to engage in such practices and to adopt measures that immediately remedy violations.
The lawsuit also seeks 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.
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