The Western States Trucking Association plans to protest a California Supreme Court Ruling that would make it difficult – some say impossible – for transportation companies to use independent contractor drivers.
Earlier this year, the California Supreme Court ruled that the courier and delivery service company Dynamex had misclassified its drivers as independent contractors instead of employees in order to cut costs, and in doing so, the court enacted a new standard for hiring independent workers. The ruling would place the burden of proof on the company to prove that a worker is being properly classified under a new “ABC” test. The test requires companies to prove that an independent contractor is free from the control and direction of a hiring entity, that the work a contractor does is not similar to the majority of the work done at a hiring company, and that the worker is customarily engaged in similar work in an independent context.
While in the trucking world, especially in California, the issue of contractor misclassification has been a recurring issue at the ports, the ruling can affect non-employee drivers of all kinds, including owner-operators, and even contract drivers for Uber.
The WSTA believes that the ruling is using the port driver issue to potentially dismantle a work model that allows owner-operators in the trucking industry to choose who to work for and say that it could affect a trucker's ability work independently of a particular company at all. The group filed suit in July to challenge the Supreme Court ruling, and it plans to hold a rally at the California State Capitol in Sacramento on Aug. 15 to express to state legislators what it believes is at stake.
“This issue isn’t about ‘port drivers,’ but they will be the poster child for everything evil about the independent contractor model, and we are going to do everything to counteract that false narrative,” Joe Rajkovacz, director of government affairs and communications for WSTA, told HDT.
Opponents of the Supreme Court ruling are seeking a legislative review of it, sooner rather than later, but in a recent interview with Capital Radio, California Assembly Speaker Anthony Rendon said that it was unlikely to occur this year. The legislature's current session closes at the end of the month and does not reconvene the rest of the year. Truckers are not alone on this issue, ride-sharing companies Uber and Lyft have a lot to lose if this new test is applied to their business models and have been reportedly lobbying state politicians to do something about it. In an Op-Ed in the Sacramento Bee, president and CEO of the lobbying group California Chamber of Commerce, Allan Zaremberg, called on the state to put a stop to the new standard, or at the very least limit its reach to only workers directly involved with Dynamex until a more fair broad standard could be created.
Proponents of the Supreme Court decision say the current independent contractor model allows companies to pay workers less than the minimum wage, and to avoid overtime pay or benefits that would be required for employees. The state could also be missing out on taxes to income that would be automatically taken out of an employee’s paycheck.
Port trucking companies, particularly in Southern California, have been hit with wage lawsuits for years from drivers or groups of drivers claiming to have been improperly classified as independent contractors. This has resulted in millions of dollars in judgements against these companies, putting some out of business. In recent years the issue has gained prominence outside of the trucking world with investigative reporting at mainstream media outlets and politicians such as Sen. Bernie Sanders (I-VT) raising the issue.
The Los Angeles City Council also made a point to determine what it could do to eliminate driver misclassification at the Ports of Los Angeles and Long Beach, even proposing the banning of trucking and warehousing companies that break local, state, and federal employment laws from operating on property owned by the city. The Ports of Los Angeles and Long Beach are some of the largest in the nation and are a major entry point for goods from the Pacific Region.