Teamsters score a win against “sharecropping on wheels.” But will the trucking industry really change?


Truckers trying to change things. (Justice for LA/LB Port Drivers Facebook page)

Along with auto technicians, fast food workers, and baggage handlers, another profession has been hit by the separation of labor from employer: Port truckers, who haul containers from cargo ships on short trips around the terminal. Years of deregulation have led to more of them being classified as "independent contractors," with lower pay and fewer rights, rather than unionized employees.

Yesterday, however, they took a step in the other direction, with a National Labor Relations Board determination that could start to reverse the trend.

To understand the implications here, consider just how different the trucking industry looks today from how it did 40 years ago. Back then, these short-haul drivers almost all belonged to the Teamsters, and were typically considered employees of the trucking (or "drayage") companies that paid their salaries, whose prices were in turn set by government rules. Then came the deregulation of the trucking business in the 1980s early 1990s, which allowed for the rise of lower-cost, non-union companies that shifted the responsibility of expenses like fuel, insurance, maintenance, and parking to individual guys who owned their own rigs. Now, shipping is cheaper and there are more truckers, but those jobs aren't quite as comfortable.

"The net result is a very low cost to the owner of that cargo, reasonable profit for the owner of the drayage company, and next to nothing for the driver," says Barb Maynard, a consultant on the Teamsters' ports campaign. That can mean a difference of thirty or forty percent in their take-home pay, according to a new analysis by the National Employment Law Project, which calculated that 49,000 out of the nation's 75,000 port truck drivers had been misclassified as contractors -- a model they've called "sharecropping on wheels" -- rather than the employees they basically are.

Attempts to fix the problem have so far failed. In 2009, the Port of Los Angeles mandated that drayage companies hire all truckers as employees as part of its Clean Trucks program. The American Trucking Association sued, and the 9th Circuit Court of Appeals struck down that provision in 2011 (the Supreme Court would dismantle other pieces of it later).

But last week, the Teamsters had a breakthrough of sorts. Employees at PAC 9 Transportation in Los Angeles had been filing complaints with the Department of Labor alleging wage and hour violations, and last November went on strike. They ultimately returned to work, but some were allegedly told that if the employees voted to join a union, the company would shut down.

That's a big no-no in labor law. So the NLRB's regional office did an investigation, and came to a deal with PAC 9 requiring it to post a notice saying the truckers have the right to unionize -- which it wouldn't do if they were just contractors.

"Region 21 has no power to extract this settlement unless these guys are employees," explains Mike Manley, an attorney for the Teamsters. "It is subtle, but within the industry, it's a big deal because it's public recognition that this model is not what they say it is."

It's not as if the independent contractors lack representation altogether. The Owner-Operator Independent Drivers Association boasts 150,000 members, both long-haul and short-haul port truckers. It's difficult for them to organize as a union, however, because of antitrust rules. If the Pac 9 employees vote to join the Teamsters, they can bargain for better wages and benefits -- which will likely involve getting paid by the hour, rather than by the haul.

David Bensman, a professor at Rutgers University's School of Management and Labor Relations, thinks that has an upside for the rest of us, too: American ports are typically far less productive than those in Asia. The differential has lots of reasons behind it, but incentivizing shipping companies to keep trucks busier -- rather than idling in the port waiting for jobs -- might help narrow the gap.

"When it's more expensive for the companies to have employees rather than drivers, they'll do a lot to utilize the labor more efficiently, and that'll lead the port to function more efficiently," Bensman says.

The American Trucking Association disputes that assertion (and most every other one that the Teamsters and labor-minded non-profits have made). "Paying by the load incentivizes the driver to get in and out of the port with their assigned load, so they can transport more loads within their regulated amount of driving time," ATA General Counsel Prasad Sharma wrote in an email.

Primarily, though, the industry argues that the independent contractor model is a valuable one, citing a University of Arkansas study that found that many truckers enjoy the sense of independence they get from being free agents. Sure, the research was funded by the Truckload Carriers Association, which is committed to maintaining the status quo -- but the sentiment does exist.

"When everything's going right, you love what you're doing," says Jimmy Stewart, a Savannah, Ga.-based trucker who used to serve as the Teamsters' ports organizer. He says he left the Teamsters when they decided to focus on making independent contractors into employees. "There are thousands who are perfectly happy to be in business for themselves."

The bigger question, though, is whether one victory at a company with 130 employees will create meaningful momentum towards unionization in an industry that's so fractured. These kinds of NLRB determinations are very fact-specific, and don't tend to build on precedent. Stewart tried organizing individual companies for years, with little progress, and isn't optimistic for the Teamsters' prospects going forward.

"You'd be there the rest of your life, and you wouldn't have a couple percent," Stewart says. "It's like emptying the ocean with a 5 gallon bucket."

The one thing that might actually make a difference is federal legislation, like a bill Sen. Bob Casey  (D-Penn.) has proposed that would require employers to classify their employees accurately, and protect employees who raise grievances. But technically, that's already the law -- the problem has been enforcing it. 

Lydia DePillis is a reporter focusing on labor, business, and housing. She previously worked at The New Republic and the Washington City Paper. She's from Seattle.
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