A Los Angeles City Councilman Monday praised news that a company is in negotiations to take over an 85-acre warehouse and trucking facility in Wilmington after the previous operator came under City Council scrutiny over its employment practices.
Cal Cartage, which is owned by NFI, has been operating at the warehouse for more than five decades, but announced in January it will close the facility in July. Toll Global Forwarding is in negotiations to sign a new lease at the site.
Councilman Joe Buscaino called the news “cause for celebration.”
“I am also proud that per my request the contract will include a worker retention clause to ensure that a number of former NFI employees will have the first opportunity to be rehired,” Buscaino said.
NFI announced in January there are about 800 people whose employment is tied to the warehouse, with a mix of employees, temporary laborers, independent contractors and vendors. The company said it would try to retain as many employees as possible.
Gene Seroka, executive director of Port of Los Angeles, said during Thursday’s Board of Harbor Commissioners meeting that the port was in negotiations with Toll, but stressed it was not a done deal.
“This announcement should not be construed in any way as a guarantee of award of a permit nor accepting any particular terms. Furthermore, any proposal is subject to (the California Environmental Quality Act) and the Harbor Department will not pre-dispose any outcome of the CEQA analysis,” Seroka said.
The Los Angeles City Council voted in September 2018 to review a revocable permit for the Cal Cartage warehouse at 2401 E. Pacific Coast Highway over concerns about its labor practices.
The move was one of a series taken within the past year by Los Angeles city leaders as they sought to pressure trucking and warehouse companies at the port to stop classifying drivers as independent contractors.
The port truckers maintain they are improperly classified as independent contractors in a scheme that deprives them of benefits and job protections while increasing their overhead costs by forcing them to lease their trucks from the companies for which they drive.
“As the winning bidder, Toll now has the opportunity to negotiate a lease with the port, act as a responsible employer by raising standards for workers at the site, and lead the port trucking industry into a new era in which the misclassification of truck drivers as `independent contractors’ is a rare criminal issue rather than the dominant business model at America’s largest port complex,” said Eric Tate, secretary-treasurer of Teamsters Local 848, which represents more than 500 port truck drivers at the Ports of Los Angeles and Long Beach.
In October, the council’s Trade, Travel and Tourism Committee, which is chaired by Buscaino, recommended veto of the proposed Cal Cartage permit and asked the Harbor Department to oversee the drafting of one that could avoid labor strife between the owners and workers.
The issue of companies at the Port of Los Angeles and the Port of Long Beach classifying drivers as independent contractors has been a focal point of numerous strikes at the port in the last five years. According to the Teamsters, workers at NFI have been involved in seven of those strikes in the last three years.
Sid Brown, CEO of NFI, said in January that NFI was unable to reach an agreement with the city, and blamed the Teamsters.
“We have been fighting, with the help of our employees, for the past four months to negotiate a deal to keep the facility open long-term,” he said. “This is not the outcome we wanted. Because of the Teamsters’ efforts, we now have been left with no other option but to shut down the Wilmington operation.”
The latest strike involving some NFI workers at the port came in October 2018. NFI officials said the strike occurred after an effort by the Teamsters to unionize its workers failed, and that only a handful of is employees at the warehouse took part in the strike.
The company said the permit negotiations were unsuccessful because of the Teamsters’ efforts to organize the Wilmington employees, though they “overwhelmingly” voted against unionization.
The Teamsters alleged in statement that the company broke numerous laws, such as threatening and intimidating workers, casting doubt on the legitimacy of the union vote.
According to a USA Monday 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.