Premium Transportation Services has filed for Chapter 11 bankruptcy, blaming its financial troubles on driver misclassification lawsuits and legal costs, according to a report in the Wall Street Journal.
The port trucking company, which is also known as Total Transportation Services Inc., had lost several misclassification lawsuits worth around $3.5 million and is currently fighting other similar claims with an additional $4 million in legal costs.
The company is also $26 million in debt, according to the L.A. Times. Compounding TTSI's problems is the generally weak freight environment right now, which the company said also contributed to its decision to file for bankruptcy.
Several companies servicing the Ports of Los Angeles and Long Beach in California have faced driver strikes in the past few years related to misclassification. Drivers for companies such as TTSI are often considered independent contractors, but some drivers believe that that they are being willfully misclassified to benefit the trucking companies and should be considered employees.
While few of the drivers in Southern California are part of a union, the Brotherhood of Teamsters has been active in the misclassification fight with related groups like Justice for Port Drivers often organizing strikes in the region.
California remains the primary battleground for the misclassification issue. Last year the Los Angeles City Council adopted a resolution that called on port trucking companies to provide drivers with proper wages and benefits and comply with state and federal labor laws.