In the wake of lawsuits and citations over safety violations, wage theft and unfair labor practices, one of the nation’s largest logistics companies announced it will shut down its massive warehouse employing 800 workers at the Port of Los Angeles.
The Los Angeles City Council had voted in October to reject the Board of Harbor Commissioners permit for the Wilmington facility, which is operated by California Cartage and its corporate parent in New Jersey, NFI.
The warehouse handles goods for some of the country’s major retailers, including Lowe’s, Amazon, TJ Maxx and Sears/Kmart.
NFI’s Wednesday announcement that it would close its 85-acre facility in July marked a victory for the International Brotherhood of Teamsters, which has sought to unionize the company’s warehouse workers and truck drivers.
“This is a very sad day for Cal Cartage, our employees, our customers and the Wilmington community,” NFI Chief Executive Sid Brown said in a statement. “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.”
NFI purchased Cal Cartage in October 2017. The year before, the Teamsters had lost a vote to unionize its Wilmington warehouse workers in a contentious election marred by charges of unlawful interrogation, implied threats of termination and physical aggression by the company.
Last year the union took its fight to city politicians, who urged the Board of Harbor Commissioners to include a "no labor disruption" provision in any deal with Cal Cartage.
Los Angeles City Councilman Joe Buscaino, who led the fight against the company, said in response to the announcement that "Cal Cartage was repeatedly fined for not complying with labor laws and mistreating their employees."
He added that the flow of goods through the port would not slow down because the port will seek a new operator for “this strategically located and highly sought-after location."
Any new operator of the Wilmington site would be required to adhere to a city ordinance mandating that it retain employees of the previous operator, Buscaino said.
NFI’s Wilmington operations had been hit with seven Teamster-led strikes since 2015, each lasting one to seven days. In voting against NFI’s permit, the council said any new company operating at the site should agree to “include safeguards to protect against work stoppages in any future permit or lease” — a provision which implies cooperation with union organizers.
“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 to avoid the labor disruptions that have plagued the Port property,” the Teamsters said in a statement. “NFI should act responsibly and stop pointing fingers at the Teamsters when it is NFI that has continuously and persistently broken the law.”
NFI said it would transfer the Wilmington customers’ operations to its other warehouses in Torrance, Compton, Carson and City of Industry, and it would pay severance to employees. Spokeswoman Alice Walton said the company expects the facility’s temporary workers would be eligible for severance but “details still need to be worked out.”
She disputed a Teamster estimate that as many as half of the warehouse’s workers are staffing agency temps, but declined to provide NFI figures.
NFI/Cal Cartage has been in the crosshairs of government agencies and worker activists for years. Since 2015, the California Labor Commissioner has issued 36 citations against the company for misclassifying its drivers as independent contractors rather than employees. CalCartage was ordered to pay $7.3 million to 36 drivers for unlawful deductions and unreimbursed expenses.
The company settled 12 cases and is appealing 24.
In January 2018, Los Angeles City Atty. Mike Feuer sued three NFI companies, Cal Cartage Express, CMI, and K&R Transportation, for allegedly violating California’s Unfair Competition Law; misclassifying port truck drivers as independent contractors, thus denying them legal wages; and evading taxes.