California Court Awards $2.2 Million in Ruling for Pacer Cartage Drivers
This story appears in the Feb. 9 print edition of Transport Topics.
A California state court has awarded seven drayage drivers for an XPO Logistics subsidiary $2.2 million in an ongoing battle over worker classification, which could intensify with further legal action.
The ruling by Judge Jay Bloom in San Diego County found that Pacer Cartage workers were employees, rather than the company’s classification of the workers as contractors.
XPO plans an appeal.
Alvin Gomez, attorney for the drivers, told Transport Topics on Feb. 2 that he plans to file additional worker classification suits, including one against Knight Transportation and several smaller operators in Southern California.
The judge cited multiple factors in the ruling, such as the making of assignments, setting safety procedures, providing uniforms and establishing insurance requirements. Other factors cited included a requirement to sign a complex lease that was never shown to drivers, who probably couldn’t understand it because it wasn’t given to them in Spanish, their first language.
“All this evidence supports the conclusion Pacer was in control and the drivers were employees and not independent contractors,” Bloom wrote in his decision. “The key issue in this case . . . is who had control. Pacer required the drivers to follow numerous procedures . . . that far exceeded what was required under federal safety standards.”
The decision is the latest developments in the battle over worker status in California. Last year, Hub Group Inc., which ranks No. 8 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, shifted driver status in the state from contractor to employee after unfavorable state regulatory decisions.
In addition, the Teamsters union has added several companies in its ongoing drive to convert workers into employees who can become union members. Contractors can’t join unions because they aren’t employees.
As for Knight, which ranks No. 31 on the for-hire TT100, it has an intermodal trucking business that is part of its logistics unit.
Knight didn’t respond to requests for comment.
XPO Chief Operating Officer Troy Cooper said in a statement that “the drivers in question are properly classified as contractors and that this case is without merit.”
Bloom issued his decision after an appeal by Pacer Cartage of a 2014 ruling by the state’s Division of Labor Standards Enforcement, covering the same drivers. XPO, which ranks No. 12 on Transport Topics Top 50 list of the largest logistics companies in North America, acquired Pacer Cartage’s parent, Pacer International Inc., last year.
“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,” Gomez said.
The court awards to the drivers ranged from $85,633 to $387,936.
Gomez told TT that, in addition to the planned class action complaint against Knight, actions against other fleets affect about 200 drivers and five companies.
Before Bloom’s Jan. 28 ruling, workers at Pacer Cartage and other Southern California port trucking fleets have challenged contractor status.
The Teamsters’ latest success was the addition last month of Shippers Transport Express in Los Angeles and Long Beach, the two largest U.S. ports, to the ranks of employee truckers eligible for union membership.
That carrier is a unit of SSA Marine, which operates ocean terminals with workers from the International Longshore & Warehouse Union.
