The owners of a trucking firm targeted by the Teamsters union have launched a company with employee drivers, giving the union and drivers a win in their effort to classify truckers who serve the Los Angeles and Long Beach ports as employees, rather than independent contractors.
Drivers from several companies contend that they are improperly classified as independent contractors, leaving them with fewer workplace protections and lower pay than if they were employees. Despite long hours, drivers say, they often net less than the minimum wage after the companies deduct money for fuel, truck leases and other costs.
The new firm, Eco Flow Transportation, was formed following discussions with the office of Los Angeles Mayor Eric Garcetti. The mayor said talks are ongoing with other firms to launch similar employee models, although he declined to name those companies.
"We are hoping that by bringing people together, a new business strategy can change this industry," Garcetti said at a news conference Monday. "The misclassification of truck drivers are not the gripes of a few truck drivers, but the battle cry of a systemic problem that must be addressed."
Behind the new trucking firm is Saybrook, a Los Angeles private equity firm that holds a controlling interest in trucking firm Total Transportation Services Inc. That Rancho Dominguez company has faced allegations of wage theft and that it fired truck drivers last year for organizing efforts and refusing to drop wage claims.
The Teamsters said in September that four of the fired truckers were among 14 Total Transportation drivers awarded an average of $68,211 each for unpaid wages, illegal deductions and other damages after the state's labor commission found they had been misclassified as independent contractors for more than three years.
Total Transportation has denied it improperly classified drivers, that it fired the workers or demanded they drop their wage claims. The company has also been targeted by three strikes supported by the union.
As part of a "port solutions agreement," Eco Flow will use only employees and, thus, claims against Total Transportation with the National Labor Relations Board and the California Division of Labor Standards Enforcement were settled, according to the Teamsters.
Eco Flow will also will take a neutral position to unionization and offered all the roughly 35 allegedly fired Total Transportation drivers a job, said Julie Gutman Dickinson, an outside counsel for the Teamsters' port division.
Alex Cherin, a spokesman for Total Transportation, said the firm will "continue to operate" and still have independent contractors. He said he couldn't comment further because of a confidentiality agreement and legal issues.
Most truck drivers who serve the L.A. and Long Beach ports remain independent contractors.
Jonathan Rosenthal, a principal with Saybrook and board chairman of Eco Flow, said the new company will "serve as the new model for port trucking — a model in which drivers have a vested interest in the future success of the company while providing a stable, consistent and productive workforce."
The Teamsters said the company currently has 80 drivers, with a goal of reaching 500 within a year.