Total Transportation Services, Inc. v. Armenta

Total Transportation Services, Inc. v. Armenta

The estimated 75,000 port truck drivers in the United States are an indispensable link in the American retail supply chain, transporting about 250 million metric tons of imported goods (worth $900 million) from our nation’s ports to railheads, shipping warehouses, or retail distribution centers. Multibillion-dollar retailers, however, demand rock-bottom prices, which in turn drives down the take-home pay for all workers in the supply chain, including port truck drivers. More often than not, the drivers are considered independent contractors, paid by the load and responsible for all the costs of the trucks they drive, including leasing, fuel, taxes, maintenance, insurance, and repairs.

The drivers report for duty each day at the time specified by Total Transportation Services, Inc., but don’t know how many loads they’ll be given (or if they’ll be given one at all) and don’t get paid for waiting. After payroll deductions for everything from truck leases to parking in the company lot—and lost hours waiting for work—the drivers often only clear the equivalent of minimum wage. 16-hour days are not uncommon, because they have to gross $100,000 a year to net $20,000 to $30,000. Many drivers earn such low incomes that their families qualify for public assistance programs.

Port truck drivers working for TTSI decided to fight back by filing claims with the California Labor Commissioner arguing that the drivers are misclassified as independent contractors and that they are owed wages for waiting time, overtime, and illegally deducted expenses. TTSI responded by filing a petition to compel arbitration against the drivers in California state court, contending that the arbitration agreement it alleges is part of the independent contractor agreement bars the drivers’ administrative claims.

Public Justice, along with Bet Tzedek Legal Services, represent five TTSI drivers in the state-court action. We argued, and the court agreed, that the drivers fall under the Federal Arbitration Act’s section 1 exemption for workers engaged in interstate commerce. Accordingly, state law controlled, and state law prohibited arbitration of the drivers’ claims. On December 9, 2014, the trial court refused to compel arbitration and dismissed the case.

Meanwhile, all of the drivers prevailed on their claims before the Labor Commissioner, and those decisions are on appeal.

Co-counsel are Leah Nicholls and Vicky Ni of Public Justice and Kevin Kish, Danielle Lang, and Matthew DeCarolis of Bet Tzedek.

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