Cali Port Truckers Win $30 Million Wage Theft Settlement

California port truckers recently won an uphill battle against a logistics giant, earning them a wage settlement of nearly $30 million.

A handful of truckers brought lawsuits against two XPO Logistics subsidiaries. The civil lawsuits against Rancho Dominguez-based subsidiary XPO Port Services, and XPO Logistics Cartage in Commerce, contended that upwards of 800 drivers were misclassified as independent contractors in a move that resulted in them earning less than the Golden State’s minimum wage.

The truckers’ lawsuit indicated the pair of XPO operations also failed to reimburse hard-working truck drivers for business expenses and sidestepped meal break laws, among other infractions. Approximately $19 million of the $29.5 million settlement will go directly to the truckers involved in the lawsuit, with attorney fees consuming the remainder.

“With the legal and regulatory landscape in California evolving, we reached a settlement on terms that are favorable for XPO and should put this matter behind us,” a spokesperson for the logistics corporation reportedly stated.

California has been embroiled in a trucking industry controversy since passing a law known as AB5. The measure requires the vast majority of independent truck drivers and owner-operators to be considered company employees. The AB5 law was designed to eliminate gig workers in an effort to help the state more easily collect payroll and other employment taxes. Outfits such as Uber and Lyft were able to bring a referendum to vote and carve out an exemption. But members of the trucking sector have been divided.

The California Trucking Association has a pending lawsuit the organization hopes the U.S. Supreme Court will hear and rule in favor of independent truckers. By contrast, Teamster officials have largely supported AB5 because it pulls what some see as outliers into employee ranks who could potentially become union members.

“Today’s victory makes clear to other misclassified drivers that the days of misclassification are coming to an end,” Teamster vice president Ron Herrera reportedly stated regarding the settlement. “To employers, these settlements should serve as a clear reminder that depriving workers of their wages or failing to provide them with essential job protections is unacceptable, and they will be held accountable.”

The International Brotherhood of Teamsters has reportedly been working tirelessly to unionize XPO operations. The logistics corporation is based in Greenwich, CT, and ranks as the third-largest less-than-truckload freight broker in North America, and leads Europe. Before AB5 and the subsequent lawsuit, the XPO business model entailed connecting independent truckers with companies that require transportation services. The logistics giant reportedly works with upwards of 38,000 independent freight haulers and leverages nearly one million trucks. That business model is likely to change in California.

A judge recently issued preliminary approval of the settlement with a final order expected to be handed down on Dec. 18.

Sources: latimes.com, hcmag.com