Understanding the Clean Truck Litigation Part VI:

Transcription

1 Understanding the Clean Truck Litigation Part VI: Teamster and worker misclassification update. Presented by Cameron W. Roberts Sean Brew Roberts & Kehagiaras LLP

2 This is going to go on for years. Judge Harry Pregerson, Ninth Cir.

3 IN THE BEGINNING... In November 2006, the Ports voted to approve the San Pedro Bay Ports Clean Air Action Plan ( CAAP ). The CAAP s general goal is to reduce pollution in the Ports and surrounding areas, thereby reducing the attendant health risks. One component of the CAAP is the Clean Truck Program ( CTP ).

4 THE CONCESSION AGREEMENT MAYOR VILLARAIGOSA LAUNCHES LANDMARK CLEAN TRUCK PROGRAM TO CLEAN LOS ANGELES' AIR Bans over 10% of port trucks or 2000 dirty-diesel trucks, removing over 350 tons of harmful port-related emissions from Los Angeles' air. When fully implemented in 2012, the,clean Truck Program takes over 16,000 dirty-diesel trucks off the road, slashing harmful truck emissions by 80 percent.

5 THE CONCESSION AGREEMENT The Ports of Long Beach and Los Angeles have each adopted a CTP and a Concession Agreement (the Agreements ). The Agreements required motor carriers to comply with a number of provisions. Failure to comply would result in barring the motor carrier from entry. The ATA filed a legal challenge to the Agreements.

6 KEY ISSUES Certain provisions are Not subject to prices, routes and services in the FAAA Act: Maintenance provision; Placard provision; Financial capability; Subject to the Safety Exception: Maintenance provision; Placard provision; NOT subject to FAAA Act because the Port of Los Angeles is acting as a market participant: Employee mandate Parking

7 PRICE, ROUTE, OR SERVICE Federal Aviation Administration Authorization Act Preemption is the general rule. 49 U.S.C (c)(1): A State may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service or any motor carrier... with respect to the transportation of property.

8 MARKET PARTICIPATION If state action is proprietary, rather than regulatory, such action is not generally subject to statutory preemption. The market participant test does not turn on whether the state or local government is a purchaser or seller of the goods and services at issue. The Port s participation in the port services market is sufficient. Concession Agreement was a business necessity, in order to eliminate evident obstacles to POLA growth.

9 LITIGATION: KEY PLAYERS Port of Long Beach Port of Los Angeles ATA U.S. Government Interested Third Parties/Amici Curiae a. Environmental Interests b. Shippers c. Labor

10 SAMPLING OF AMICI CURIAE National Retail Federation National Right to Work National Industrial Transp. League U.S. Government Sierra Club NRDC

11 NINTH CIRCUIT On September 26, Ninth Circuit Court of Appeals eliminated the employee mandate. Preserved all other portions of the Concession Agreement. POLA did not file a Petition for a Writ of Certiorari, thus allowing the ruling adverse to it on the employee mandate to stand.

12 SUPREME COURT Whether an unexpressed market participant exception exists in Section 14501(c)(1) and permits a municipal governmental entity to take action that conflicts with the express preemption clause, occurs in a market in which the municipal entity does not participate, and is unconnected with any interest in the efficient procurement of services. Whether permitting a municipal governmental entity to bar federally licensed motor carriers from access to a port operates as a partial suspension of the motor carriers federal registration, in violation of Castle v. Hayes Freight Lines, Inc., 348 U.S. 61 (1954).

13 SUPREME COURT The Supreme Court issued its opinion on June 13, Opinion POLA was acting as regulator, coercive power. Exclusion of carriers for breach of the Concession (not ripe), but placarding and parking restrictions are preempted. Castle v. Hayes Freight Lines, Inc., 348 U.S. 61 (1954).

14 THE GOVERNOR Teamsters say: Brown a lifelong public servant... successfully fought to protect working families and consumers, including port drivers fighting against trucking company abuses. - Teamster press release.

15 TASK FORCE FEB California partners with the U.S. Department of Labor to work together to attack misclassification with the Labor Department, we are poised to use all the tools in our arsenal to lift the floor for hardworking employers and employees throughout the state. assification/pressrelease.htm

16 TEAMSTER ACTIVITIES The Teamsters often consult with attorneys representing drivers in these misclassification lawsuits. Teamster support of misclassification statutes in WA, NY and NJ (Christie veto). 15 drayage drivers from Green Fleet Systems went on a 24-hour strike. Nick Weiner, Teamsters port campaign director reported recent demonstrations in Oakland, Southern California, New Jersey and Savannah.

17 TEAMSTER ACTIVITIES A eature=player_embedded

18 TOLL LOGISTICS $19.75 per hour. A $6 increase. $.050 annual raise. 401(k) plan. $30 for health insurance. Down $120 per month. Contract_Highlights.pdf y-at-ports-seen-as-the-winning-recipe-forworkers-everywhere/ Toll-AGM-Leaflet.pdf

19 Employee vs. Independent Contractor Avoiding Misclassification

20 Benefits of IC Classification Save $$$ Simplifies payroll Eliminates deductions: WC, SDI, Taxes, etc.

21 Risks of Misclassification Liability for Unpaid taxes (IRS, FTB, SSA) No workers compensation (carrier will not pay any claims) DLSE Penalty is twice the cost of SCIF rate Fund for Uninsured Employers: restitution

22 Risks, cont d Back pay, overtime, meal and rest breaks, split shift, travel time, etc. (DLSE and/or U.S. DOL and/or civil suit) Increased risk of audits by different agencies

23 Definitions IRS DEFINITION: Independent Contractor Defined... The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax... You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed. Employed/Independent-Contractor-Defined

24 Definitions, cont d CA Labor Code 3353 "Independent contractor" means any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.

25 Factors: TOTALITY OF CIRCUMSTANCES Primary fact: control of work Control/ownership of tools, vehicles Control of specific methods, routes Control of hours Method of payment (hourly vs piece rate)

26 Factors, cont d Distinct occupation or business; Kind of occupation; Usually done under the direction of the principal or by a specialist without supervision; Skill required in the particular occupation; Who supplies the instrumentalities, tools, and the place of work for the person doing the work; Length of time for which the services are to be performed; Method of payment, whether by the time or by the job; Regular business of the principal, and What the parties believe.

27 Factors, cont d Distinct occupation or business; Kind of occupation; Usually done under the direction of the principal or by a specialist without supervision; Skill required in the particular occupation; Who supplies the instrumentalities, tools, and the place of work for the person doing the work; Length of time for which the services are to be performed; Method of payment, whether by the time or by the job; Regular business of the principal, and What the parties believe.

28 Contracts Contract label (IC) is not controlling Have contract reviewed Avoid terms that indicate employee, at will, etc. Using independent contractor agreement, but including terms that are applicable to employees, especially at-will (either party can terminate the contract with or without notice, with or without cause).

29 Common Mistakes Using employees and independent contractors to perform the same type of work, and treating them the same (work in your office, use your equipment, attend meetings, parties, receive your employee handbook). Paying workers as you would employees (by the hour or salary) Lay-off employees and rehire as independent contractors.

30 WHAT NOT TO DO - DO NOT Use a Driver Handbook that looks like an employee manual or Requires the driver IC to: Use company forms; Constantly communicate with MC dispatch; Report at a time certain Show up at a specified time or face disciplinary action; Give advance notice of vacation time; Accept load batched as all or nothing.

31 MORE OF WHAT NOT TO DO - DO NOT Require the driver IC to: Wear company logo; Shirts; Boots; Hats; Paint the truck a particular color; Display a company ID card.

32 WHICH FACTORS TO USE? the individual factors cannot be applied mechanically as separate tests; they are intertwined and their weight depends on particular combinations. We must assess and weigh all of the incidents of the relationship with the understanding that no one factor is decisive, and that it is the rare case where the various factors will point with unanimity in one direction or the other. of the MC depends on the driver - IC.

33 FOR ADDITIONAL INFORMATION Contact Cameron W. Roberts Sean Brew (310)

34 DISCLAIMER Roberts & Kehagiaras LLP in Los Angeles serves the trade, transportation, and insurance communities. Telephone: (310) or on the Internet at. This article provides information about the law designed to help readers address their own legal needs. But legal information is not the same as legal advice -- the application of law to an individual's specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.