California Bill Seeking to Ban Independent Truck Operators Shelved

A California Legislature bill seeking to make all drayage drivers in the state employees of the trucking firms they work for and which would effectively ban independent owner operators from working in the state's ports has been shelved--mostly likely for the rest of the year.

Assembly Bill 950, introduced by Speaker of the Assembly John Perez (D-Los Angeles) in February, would dictate that "for purposes of state employment law (including workers' compensation, occupational safety and health, and retaliation or discrimination) a drayage truck operator is an employee of the entity or person who arranges for or engages the services of the operator."

The bill, if passed, could affect the majority of the more than 15,000 drayage drivers in the state who currently work as independent owner operators.

Labeled the Truck Driver Employment and Public Safety Act, AB950 cleared the California State Assembly’s Labor and Employment Committee in early May, but was ordered to the Assembly inactive file on June 2 at the request of Assembly member Charles Calderon (D-City of Industry).

The move indicates that the bill is unlikely to be taken up during the current legislative session and is not likely to be revisited until at least early next year.

The decision to move the bill to the inactive rolls comes after discussions between the California Trucking Association and Perez.

The discussions allowed the CTA to express the industry belief that the bill, if passed, would be economically punitive to the state's transportation industry. The CTA also put forward a plan to have representatives of the trucking industry meet in the coming months with Perez to further discuss the alleged misclassification issues in the drayage industry.

CTA executive director of external affairs Michael Shaw pointed out that in addition to criteria at the federal level used to determine worker classification, most notably through the Internal Revenue Service, a slew of California agencies have varied criteria for determining worker classification--many of which do not correlate to each other. A proper test for determining classification, Shaw said, is one of the things that needs to be discussed with Perez.

Shaw was also able to point out to Perez that shortly before leaving his role as state Attorney General last year, Governor Jerry Brown conducted an investigation of alleged misclassification by trucking firms in the ports of Long beach and Los Angeles. The investigation found only five violators, most very small operations, among the several hundred trucking firms servicing the two ports.

The bill by Perez, a union organizer and cousin of Los Angeles Mayor Antonio Villaraigosa, mirrors an ongoing tactic being pushed by the International Brotherhood of Teamsters that attacks independent owner operators’ status as a "misclassification." Under current law, per-load independent owner operators cannot be unionized, only per-hour employees.

Teamsters president James Hoffa has repeatedly stated that a primary organizing goal of the Teamsters is to unionize the nation's drayage drivers. Hoffa worked closely with Villaraigosa to develop "employee-only" language in the Port of Los Angeles Clean Truck Program – language that remains in litigation.

More than 30 labor, environmental, and “social justice” groups, including the Teamsters, have signed onto the bill as supporters.

"The indisputable reality is that port drivers misclassified as "independent contractors" do exactly the same work as the much smaller group of port drivers who some trucking companies have hired as 'employees,'" the California Teamsters Public Affairs Council wrote in its statement to the bill.

Two-dozen industry groups, representing the vast majority of the intermodal industry in the state and including several groups representing drayage drivers such as the CTA, have tendered their opposition to the bill.

"Rather than address potential misclassification, this bill reaches too far in eliminating a class of drivers and small businesses that represent the dominant model for the drayage industry," the California Trucking Association said in its opposition statement to the bill.