LA Port Truck Plan Passes Another Hurdle

Sept. 17, 2008
A federal judge refused to stop the ports of Los Angeles and Long Beach from implementing the controversial plan requiring drivers to be employees of port concession companies

A federal judge refused to stop the ports of Los Angeles and Long Beach from implementing the controversial plan requiring drivers to be employees of port concession companies.

US District Court Judge Christina Snyder cited security in her support of the concession requirements required in the plan. Ostensibly a clean air initiative, the plan calls for drivers to be employees of companies that are granted concession rights at the ports. This has sparked concerns that the largely independent pool of drivers would be replaced by unionized, company drivers.

The injunction sought by motor carriers would have postponed the October 1st start of the plan, which included a ban on pre-1989 trucks. By 2012, all trucks serving the port would be required to meet 2007 emissions standards.

The American Trucking Associations, supported by the Intermodal Motor Carriers Conference, argued that the concession programs “unlawfully re-regulate the port trucking industry to the detriment of motor carriers, shippers, businesses and consumers that depend on the products that are handled at those ports.”

ATA had asserted in its brief that the ports are reshaping the port drayage market and undercutting the ability of smaller motor carriers to compete in the market by utilizing subsidies to entice national motor carriers to operate under what ATA considers a costly and “draconian” regulatory system. The port concession plans structure the market by state regulation rather than competition, argued ATA, driving up cargo costs that quickly will translate to higher prices for consumers.

ATA's brief also said under the concession plans there would be less money for truck retirement subsidy programs designed to meet port environmental goals.

The ATA said it supported the ports’ bans on older, polluting trucks and the timetable for replacing them. And, it was in favor of the funding programs to speed replacement of the trucks.

At the time it filed the brief, ATA President and CEO Bill Graves said, “The Port of Los Angeles’ further intrusion into the competitive structure of the drayage market makes the ATA lawsuit even more important and illustrates precisely the type of disruption of trucking services in the economy that Congress found so inefficient and disruptive. Creating an artificial, non-competitive market with highly inflated costs and prices hinders our national competitive ability and sets a dangerous precedent.”

In other news, the International Brotherhood of Teamsters “applaud[ed] California Attorney General Jerry Brown for filing of lawsuits against trucking companies that service the Ports of LA and Long Beach and engage in the misclassification of port truck drivers to circumvent state employment taxes and deny the workers their basic rights and protections as employees, including disability and worker's compensation.”

The Teamsters reported that two lawsuits filed in Los Angeles Superior Court targeted trucking companies that have allegedly classified drivers as independent contractors instead of employees.

"By unlawfully labeling the port drivers independent contractors, these trucking companies exploit the system to deny workers and their families their right to benefits and fair compensation," said Jim Santangelo, Teamsters Western Region International Vice President. "Attorney General Brown is doing the right thing by standing up against these trucking companies who cheat the harbor communities out of good middle-class jobs."

The issue could be largely mooted by the LA/Long Beach requirements under the Clean Truck Program that drivers be employed by companies holding concession contracts with the ports. The licenses for the two ports are slightly different. Los Angeles would require carriers to hire hourly drivers. The Port of Long Beach would permit hourly or contract drivers.

The ATA and industry groups plan to appeal the decision to the 9th District Court of Appeals.

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