Judge Stays LA Port's Driver Employee Requirement

A federal judge in California stopped the Port of Los Angeles from implementing a key piece of its concession program for drayage carriers, pending an appeal of the issue to a higher court

by Staff

October 27, 2010

Judge Stays LA Port's Driver Employee Requirement — Carriers at the Ports of LA and Long Beach may continue using owner-operators while the case is appealed.

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A federal judge in California stopped the Port of Los Angeles from implementing a key piece of its concession program for drayage carriers, pending an appeal of the issue to a higher court.

Judge Christina A. Snyder of the U.S. District Court for the Central District of California agreed with American Trucking Associations that the port's plan to require all drayage drivers to be employees of companies, rather than owner-operators, should be stayed pending further review.

The case presents "serious legal questions," Snyder said in her Oct. 26 order. Drayage carriers serving the port are likely to "suffer irreparable harm" due to the employee driver provision if the stay is not granted she said.

Snyder also said that the carriers would be harmed by the port's prohibition against parking tractors on city streets, but the public interest there weighs more in the port's favor so she denied ATA's plea for an injunction on that issue.

This decision puts a stop to the port's plan to start phasing in its driver employee requirement next year, pending the review by the U.S. Court of Appeals for the 9th Circuit that ATA is seeking.

The port had planned to require drayage companies to convert to an all employee workforce over three years: 20 percent by the end of next year, 66 percent by the end of 2012 and 100 percent by the end of 2013. Right now approximately 90 percent of drivers working at the port are independents.

The key underlying legal issue in the case has to do with Snyder's earlier finding that the concession program is legal under the "market participant" doctrine - the port is a private business and is thus exempt from the law that says only the federal government has the authority to regulate trucking business operations.

The port's Clean Truck Program has by all accounts done a good job of improving air quality in and around the port, the employee requirement is a matter of deep concern to trucking and shipping interests not just in California but around the country.

It alarms carriers and shippers because it would open the door for unionization of port drivers.
The owner-operators who serve the port are independents and under current law cannot be organized. There is no guarantee that the Teamsters could succeed in organizing the drivers, but if the Port of LA prevails the union would be able to try.