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Pac 9 Port Truck Drivers Defeat Arbitration Agreement, Will Have Wage Claims Heard

Pac 9 Port Truck Drivers Defeat Arbitration Agreement, Will Have Wage Claims Heard

Image via Teamster.org.

By Victoria W. Ni

Senior Attorney

It’s day four of the strike by more than 120 port truck drivers in L.A. and Long Beach, who have vowed to stop work until they are reclassified as employees. It takes courage to strike when you  have mouths to feed and rent to pay. But, the drivers say: enough is enough. 

And Tuesday’s court decision wiping away an arbitration clause gives them reason to cheer and hope that their courageous stand will bring change.

The companies they work for misclassify drivers as independent contractors, depriving them of employee rights and forcing them to bear most of the operational costs of the business—like the cost of the trucks, maintenance, insurance, and fuel. This means the drivers have to gross about $100,000 just to take home $20,000.

The industry’s shift to an independent contractor model (thanks to deregulation) correlates with a 30 percent decline in wages between 1980 and 1995.  The median net earnings for port truck drivers classified as independent contractors is only $28,783 per year.

Through their strike the drivers found strength in numbers, and now, no arbitration agreement stands in the way of the more than 50 drivers who seek a ruling from the California Labor Commissioner that Pacific 9 Transportation owes them about $5 million for unpaid wages and illegal paycheck deductions. Tuesday, four drivers defeated Pac 9’s arbitration agreement in court, with representation by Public Justice in Oakland and the Wage Justice Center in L.A.  A state court judge found the agreements to be unenforceable, so the drivers’ Labor Commissioner hearings are set to go forward on July 14.

Late last month, a different judge found the arbitration agreement of Green Fleet Systems—another trucking company whose workers are striking—to be unenforceable.

Why does this matter? If the arbitration agreements had been upheld, then the arbitration rules would have required the drivers to pay hundreds of dollars just to initiate an arbitration, not to mention the hundreds of dollars per hour that an arbitrator demands to preside over a dispute. Because the arbitration rules are complex and the drivers generally speak poor English, the drivers would have had to hire lawyers and translators to help them navigate the process. And at the end of the day, the results of the arbitration would have been secret, precluding the drivers from comparing notes with co-workers. In other words, no driver would want to or could ever afford to get wage claims heard under those rules.

Compare that with the process before the Labor Commissioner, designed to offer an informal and affordable hearing by which workers can get wage claims resolved without hiring a lawyer, and where translators are offered for free. 

In the last year or so, up to 600 port-truck drivers filed claims with the state Labor Commissioner. The companies, perhaps secure in the idea that arbitration agreements stood in the way of those claims, didn’t seem terribly worried.

Now they are. Expect appeals of Tuesday’s ruling.

For now, we can revel a bit. Striking workers digging into profits, and crumbling arbitration agreements—a bad week for the companies, and a good week for us. 

Chalk one up for the little guy.