A southern California drayage company will have to make all its independent contractor drivers into union employees under a settlement of a longstanding labor dispute.

On the eve of an employee misclassification trial, Michigan-based Universal Logistics Holdings Inc. and the International Brotherhood of Teamsters agreed to a settlement resolving 11 unfair labor practice charges that were at various stages of litigation, according to the National Labor Relations Board.

There were seven cases pending review before the NLRB and another set of cases was set to begin on August 4. Some of the allegations, according to the Teamsters, were that Universal illegally fired truck drivers in retaliation for voting for the Teamsters and moved their work to drivers misclassified as independent contractors at ULH’s other affiliated entity, Southern Counties.

A Teamsters news release said the agreement brings the company into compliance not only with the National Labor Relations Act but also with California’s Assembly Bill 5 law. AB5 makes it extremely difficult for trucking companies to use independent contractor drivers.

A Universal news release characterized the deal as a “partnership” and said through “careful negotiation, the parties reached a ‘best in class’ arrangement that is firmly anchored by a top-notch labor agreement.”

The company said the agreement will provide local membership with benefits and Universal's customers with AB5-compliant services in the Los Angeles and Long Beach drayage market.

“We are extremely excited to extend our relationship with the Teamsters to the Los Angeles/Long Beach drayage market,” said Universal CEO Tim Phillips in a statement. “Universal has been in partnership with the Teamsters for over 20 years, and our nearly 2,000 current Teamster members have long provided our many customers with superior service and trustworthy capacity.

“Solidifying our relationship with Local Unit 848 will give Southern Counties the ability to advance its capacity footprint in a changing California labor model and continue to be a leader in the drayage space.”

Terms of the Universal-Teamster Settlement

The NLRB reported that under the private settlement with Teamsters Local 848, Universal will:

• Re-establish its closed Compton, California, drayage business.

• Provide offers of reinstatement to the approximately 66 affected drivers.

• Pay millions in back pay to the approximately 66 affected drivers.

• Recognize the Union as the representative of the unit of drayage drivers.

• Enter into an agreed first collective bargaining agreement for the unit of drayage drivers.

• Agree not to misclassify drivers as independent contractors.

• Provide an option for other drivers at Universal Intermodal subsidiaries to transfer as full-time employees to the Union-represented drayage business.

• Post at various facilities and mail to the drivers a notice that informs employees of their rights and remedies of unfair labor practices under the National Labor Relations Act.

Teamsters Fights Employee Misclassificatoin

In its announcement, the Teamsters emphasized that Universal’s southern California drayage drivers will become employees rather than independent contractors.

“Universal and the Teamsters have committed to growing the unit of drivers so that Universal can continue expanding and serving even more customers with a professional Teamster workforce. This gives customers additional peace of mind and ensures employees receive all adequate legal protections,” said Eric Tate, Local 848 Secretary-Treasurer.

Teamsters General President Sean M. O’Brien hailed the agreement as a big step but said there’s more work to be done.

“The Teamsters will continue to fight until every misclassified worker is an employee under the law. We will not rest until trucking companies recognize their drivers as employees and treat them with dignity, and that includes respecting their right to form a union.”

Universal Logistics Holdings owns subsidiaries providing transportation and logistics solutions throughout the United States, and in Mexico, Canada and Colombia.