NLRB claims two trucking companies misclassified drivers at Ports of Los Angeles, Long Beach

The long-simmering problem of how to correctly classify trucking industry workers—either as contractors or employees—has arisen once again.

In a precedent-setting move, the National Labor Relations Board’s (NLRB) general counsel is alleging two trucking companies are misclassifying drivers as independent contractors in violation of federal labor law.

In what the Teamsters union is calling a significant victory for the rights of truck drivers who work at the Ports of Los Angeles and Long Beach, Region 21 of the NLRB issued a complaint on March 17, alleging that Container Connection and numerous Universal Logistics Holdings (ULH)-affiliated companies, acted as a single employer. That would violate federal labor law, including misclassifying its drivers as independent contractors.

As part of the complaint, the NLRB is also seeking to force ULH/Container Connection to not only reclassify its drivers as employees, but also to compensate them for income lost as a result of their misclassification, a precedent-setting move.

The NLRB also alleged that ULH/Container Connection refused to let drivers return from COVID disability leave, effectively firing them because of their support for a union, along with other illegal retaliation in response to the drivers’ protected union activities.

Michigan-based Universal Logistics Holdings Inc. is a full-service provider of customized transportation and logistics solutions. Founded in 1932, UHL has evolved from a provider of regional transportation services to what it calls “a holistic provider” of logistics solutions throughout North America and in some South American countries.

ULH did not respond to a request for comment. But on its web site, ULH said its revenue rose 26% last year to $1.75 billion, from $1.39 billion in 2020. In its latest financial statement, ULH said its “business model continues to produce impressive results,” noting its improved revenue and earnings.

But its trucking segment’s results last year showed razor-thin profit margins of 1%. Its trucking unit posted $1.1 million operating income on $105 million revenue last year.

“Wage theft, unsafe working conditions and the fear that comes from not having a safety net—this is the reality for thousands of port truckers like us,” David Averruz, a port truck driver for Container Connection, said in a statement issued by the Teamsters.

“I’m glad the NLRB has finally taken up this issue and recognized that ULH and Container Connection broke the law,” Averruz added. “But I also know that there’s so much more to be done to win justice for me and my coworkers. We need our basic rights respected, and we’ll keep fighting until we win.”

The NLRB’s complaint sets a trial date of June 13, 2022 on a host of labor law violations, including:

• misclassifying its drivers as independent contractors when in fact they are employees (i.e., misclassification in and of itself violates the National Labor Relations Act);
• interrogating employees about their union activities and the union activities of other drivers;
• threatening drivers that if they own their own truck, they are not employees and cannot be represented by the union;
• threatening drivers that organizing would be futile because they did not have a right to organize if they owned a truck;
• telling drivers that they are independent contractors when in fact they are employees; 
• interfering, restraining and coercing employees in the exercise of their rights by telling employees that they should not try to change their co-workers opinion about having/supporting a union;
• providing employees less-desirable assignments and decreasing the number of assignments in retaliation for their union and other protected concerted activities; and
• terminating two employees in retaliation for their union and other protected concerted activities

“With this powerful complaint, the NLRB has put real teeth into our country’s foundational labor laws and put ULH on notice that no company, no matter how big or powerful, is above the law,” Eric Tate, Secretary-Treasurer of Teamsters Local 848 said in a statement. “If ULH doesn’t change its ways, it will be ordered to reclassify its workforce of purported independent contractors and pay millions of dollars to its hundreds of misclassified workers,” Tate added.

Because of California’s new law to hold bad actors in the industry accountable, retailers who use ULH’s services could become jointly liable for the company’s unlawful conduct and millions of dollars in liability as well, according to the Teamsters.

The Teamsters say if ULH/Container Connection loses, several precedent-setting remedies could occur, including:

• reclassification of purported “independent contractors” as employees and make them whole for any consequential damages incurred as a result of the misclassification and other unlawful conduct;
• granting the union access to non-work areas during drivers’ non-work time;
• providing the union with contact information for each driver at the facility; and
• training for supervisors and managers by the Board regarding employee rights under the NLRB Act

The Teamsters say the NLRB’s actions follow a long history of misclassification of workers as independent contractors by Universal. By doing so, those so-called contractors are void of protections such as paid sick leave, workers’ compensation and minimum wage rules, according to the union.