Court Awards Seven Truckers $2 Million Over Wrongful Classification Claims

January 30, 2015

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Seven U.S. port truck drivers last week won what a Teamsters Union-backed group called a “historic precedent-setting victory” against one trucking company, when they were awarded more than $2 million in a court challenge over claims of wage theft in the form of unlawful payroll deductions and expenses.

A Los Angeles judge issued a ruling that Pacer Cartage Inc. was guilty of misclassifying its employees as “contract laborers” where truck drivers were forced to lease their trucks from a Pacer Cartage affiliate corporation.

According to the attorneys representing the drivers they were unaware that the trucks they were leasing were actually owned by Pacer Cartage. They claimed they unlawful scheme subjected the drivers to abnormal and abusive leasing terms including being forced to make involuntary payments on the leases from payroll checks, being prohibited from using the trucks for other business ventures or shipping companies, and being forbidden from driving their trucks home, or parking them in the lots of their choice. Payments for the leases were deducted from the drivers’ paychecks automatically, according to the lawsuit.

“This is a tremendous victory in the fight against misclassification,” said Alvin Gomez of San Diego-based Gomez Law Group, counsel for the Pacer drivers. “We believe that these decisions, coupled with the lawsuits that we have recently filed and those we intend to file in coming weeks, will force the drayage industry to make long overdue changes in their business practices to comply with state and federal labor laws.”

XPO Logistics, the parent of Pacer, told the Daily Breeze newspaper in Torrance, California, that it would appeal the ruling and it believes “the drivers in question are properly classified as contractors, and that this case is without merit.”

The court ruling is the latest in a series of legal challenges in California to trucking companies classifying some port drivers as independent contractors rather than employees.

Read more about it from the Daily Breeze.

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