A trucking company has been ordered to pay 14 of its current and former drivers a total of $3.7 million. The company’s general manager is also being held jointly responsible for payment – so even if his company won’t pay, he’ll have to.
Before it was bought by NFI, the carrier was known as California Cartage Express (CCE). They were one of the largest port trucking companies at the ports of Los Angeles and Long Beach. And according to the recent ruling by the California Labor Commissioner, they were intentionally misclassifying their drivers as independent contractors.
The $3.7 million included money for unpaid wages and business expenses, damages for not paying at least minimum wage, interest, attorney’s fees, and more.
Since CCE was acquired by NFI after the lawsuits were filed, it might have been difficult to get anyone to pay. But the California Labor Commissioner used a law passed in 2016 called California Senate Bill 588.
According to analysis published by the UCLA Labor Center, SB 588 does several important things, including:
- “It targets deadbeat employers. Businesses that have an unpaid wage judgement against them must post a bond or else they open themselves up to a wage lien by the Labor Commissioner, preventing them from doing business.”
- “It reduces the abuse of our corporate laws. Businesses can no longer use layers of subcontracts and unclear reporting relationships to deliberately make enforcing labor laws difficult. Additionally, individuals involved in wage theft will now be held accountable.”
- “It empowers the Labor Commissioner to improve collections of stolen wages. This bill streamlines the collections process that has traditionally been so burdensome as to make it nearly impossible to collect unpaid wages.”
This marks the first time that SB 588 has been used to hold a trucking executive jointly accountable for a judgement against his company.
But it’s not just the judgement that is an issue for CCE. They are also currently the target of a lawsuit brought by the Los Angeles City Attorney, they have had their lease revoked by the Los Angeles City Council, and there is at least one more lawsuit filed by former employees which has a settlement compliance hearing scheduled for August of 2019.
Soon after the judgement was handed down, CCE’s parent company, NFI, announced that CCE would be leaving their current headquarters.
“This is a very sad day for Cal Cartage, our employees, our customers and the Wilmington community,” said Sid Brown, CEO of NFI. “We have been fighting, with the help of our employees, for the past four months to negotiate a deal to keep this facility open long-term. 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 Teamsters said in a press release that “NFI’s decision to leave the property rather than bring the company into compliance with all local, state, and federal laws presents a much-needed opportunity for the City and Port of Los Angeles to seek a tenant that will follow the laws.”