Three port trucking companies that work the Port of Los Angeles were sued on Monday by the city attorney for a range of labour violations regarding the employment status and earning potential of drivers.
In the lawsuits, CMI Transportation, K & R Transportation and California Cartage Transportation Express are accused of breaking California state labour laws by misclassifying drivers as independent contractors rather than employees. That allows the firms to escape their obligations for paying benefits and certain taxes.
The three companies are also leading pioneers of the practice of lease-to-own contracts which began a decade ago when a 2008 environmental law in California required truck companies serving ports to modernize their vehicles.
Companies preferred to pass the cost on to their drivers by pushing them to sign lease-to-own contracts the workers could barely afford. In the event of default on payment, the drivers would be sacked by the company which would also seize the trucks and any payments made up to that point.
Los Angeles city attorney Mike Feuer brought the suit -which seeks penalties, restitution and a prohibition on certain practices – after the alleged exploitative behaviour was exposed in a series of investigative reports by the USA Today Network.
Feuer also claims the trucking companies have too much say on matters such as pay scales and delivery schedules for the drivers to be considered independent.