Los Angeles Sues 3 Port Companies for Driver Misclassification

The City of Los Angeles filed lawsuits against three port trucking companies, alleging that each avoided paying drivers proper wages and benefits by intentionally misclassifying hundreds of truckers as independent contractors.

City attorney Mike Feuer announced the separate lawsuits filed against CMI Transportation, K&R Transportation California, and Cal Cartage Transportation Express, three trucking companies that operate at the ports of Los Angeles and Long Beach.

The lawsuits allege that the companies purposely classify their drivers as indepenedent contractors instead of as employees to avoid obligations to pay employee benefits, such as unemployment insurance, workers’ compensation, minimum wage, and reimbursement for business expenses. The alleged misclassification also allows each company to avoid paying applicable state taxes, shifting the responsibility to the drivers.

"We allege these port trucking companies take advantage of hundreds of hard-working drivers, requiring them to pay onerous expenses just to do their jobs, while leaving them without basic benefits and protections – all to boost the companies' profits," said Feuer. "It's wrong and we're fighting to stop it."

The lawsuits argue that CMI, K&R and Cal Cartage exerted near complete control of their drivers’ assignments and work details, so they could not be fairly considered independent contractors under California law. The suit also alleges that by using leasing schemes for trucks, the company severely limits the ability of drivers to pursue work form other companies.

The lawsuits seek to prohibit each company from continuing to engage in the practices and adopt measures that immediately remedy violations. The lawsuit also seeks restitution of any money or property the companies acquired or retained as a result of the alleged business practices, as well as civil penalties of up to $2,500 for each violation.

Last month the Los Angeles City Council directed Feuer to submit a written report advising the city on what options it has to mandate fair wages and working conditions for companies servicing the Port of Los Angeles.

The City Council was also investigating a band of trucking and warehousing companies that break local, state and federal employment laws from operating on any city property. However, the recent lawsuits made no mention of such a measure.