The Los Angeles City Council Friday unanimously vetoed a proposed permit for a large warehouse operated by a major trucking company at the Port of Los Angeles and asked the Harbor Department to draft a new one aimed at avoiding labor strife between the owners and workers.
The move further inserts the City Council into the middle of an ongoing dispute between some truckers and shipping companies over the classification of drivers as independent contractors, which has been a focal point of 16 strikes at the port in the last four years.
The council vetoed a proposed permit for California Transload Services and its parent company, NFI Industries, for the warehouse on city-owned land at 2401 E. Pacific Coast Highway.
“Today I ask that we again stand up for the working men and women who are being exploited on city property in the name of corporate profits,” said Councilman Joe Buscaino, who represents the port area and introduced the motion that led to the veto. “Trucking and warehousing companies cut costs by misclassifying employees and independent contractors in order to avoid paying the wages and benefits required by federal, state and city law, and by cutting corners when it comes to worker safety.”
Buscaino also said he wanted “safeguards that protect against labor disruptions in any future permit.”
The move is one of a series taken lately by Los Angeles city leaders as they seek to pressure trucking and warehouse companies at the port to stop classifying drivers as independent contractors. Some drivers and unions have been arguing for years that labeling them contractors is a scheme to deny them just compensation and benefits by forcing them to lease their trucks from the companies for which they drive.
According to a USA Friday investigative report published in June 2017, there are around 800 companies regularly operating at the L.A. ports, and almost all of them turned to some form of a lease-to-own trucking model after California banned older trucks from entering the ports in 2008.
In January, City Attorney Mike Feuer sued three Port of Los Angeles trucking companies over their practice of classifying truck drivers as independent contractors, alleging it bilks them out of fair pay and benefits while also shifting operating costs onto their shoulders. The lawsuits were brought against CMI Transportation LLC, K&R Transportation California LLC and Cal Cartage Transportation Express LLC. All three companies were owned by Cal Carthage until last October, when they were sold to NFI Industries.
Though the council chamber was packed to capacity with CTS workers on both sides of the issue, Council President Herb Wesson chose not to take any public comment on the motion, telling the rowdy crowd that public comment had already been granted at previous meetings. Following the vote, some of the workers roared in anger and the meeting had to be recessed for several minutes.
Buscaino introduced an amending motion that would direct the port to seek a new tenant for the warehouse if negotiations over the new permit fail, and that would require any new tenant to retain all current employees at the warehouse.
“To the workers here today fearful you are going to lose your jobs, don’t let your employers fool you. The ball is in their court,” Buscaino said.
NFI officials have said a recent unionization effort at the NFI warehouse failed and its drivers prefer the current system.
In a statement issued in response to the veto, the company said: “NFI and its 800 workers in Wilmington are extremely disappointed in L.A. City Councilman Joe Buscaino’s decision to side with the Teamster union bosses and their narrow agenda over the best interests of his own constituents and a major employer in the 15th District. His action today was shameful.
“Today’s vote threatens the jobs of nearly 800 hard-working men and women who are proud to be a part of the Cal Cartage family. Despite the fact that our employees voted against joining the Teamsters by a more than 2-to-1 margin, we have repeatedly offered to let the Teamsters hold another vote in 30 days — and they have consistently refused. We are currently exploring our options at the Port of Los Angeles and remain committed to being a great employer in the city and harbor of Los Angeles.”
Before the vote, Buscaino went through a long list of legal trouble and other labor problems that NFI and its subsidiary companies have experienced, including that “federal and state agencies have repeatedly found the various companies and divisions of NFI to be in violation of labor, employment and health and safety laws.”
Buscaino also said that the city’s Office of Wage Standards, “for the first time in their existence, resorted to asking the Board of Public Works just last week to issue a subpoena to obtain basic payroll information needed to conduct an investigation of reported wage theft violations.”
He added, “This company clearly has no respect for federal law, no respect for state law, and they certainly don’t respect our local minimum wage law.”
At a council meeting last month, some workers from NFI spoke in favor of the company while others called it out for what they said are unfair business practices, as well as unsafe working conditions.
NFI managers asserted they treat their workers well and the conditions at the site are safe. They also said during the strike last month involving workers at the facility, about 20 to 25 people took to the picket line out of 800 workers.
“We have a pretty good work environment. It’s a nice place to work,” said David Garcia, general manager of NFI.
Fred Potter, vice president of the International Brotherhood of Teamsters and director of the Teamsters’ Port Division, countered that the reason the strike vote failed was because NFI had intimidated its workers.
Potter said the union would continue to organize strikes as long as NFI “doesn’t recognize the rights of the workers, as long they continue to discriminate against them for their activities with the union.”
Gene Seroka, executive director of the Port of Los Angeles, said the proposed permit is a 30-day revokable permit that could go on for years, but could be revoked at any time if the city needs access to the facility for work on an environmental impact report in relation to the Southern California International Gateway project.