Larson & Gaston recently won a major transportation law defense victory on behalf of one of its motor carrier clients. Four of the carrier's owner-operators filed claims with California's Division of Labor Standards Enforcement (DLSE), claiming to be employees of the motor carrier rather than independent contractors. This is a common accusation in the ongoing wave of litigation overtaking the transportation industry. The drivers sought over $500,000 in damages and penalties. L&G, on behalf of its carrier client, petitioned to compel arbitration of the claims pursuant to the arbitration clauses appearing in the independent contractor agreements. The drivers opposed, arguing that the arbitration clauses were unenforceable because they were unconscionable and therefore their claims should be resolved at DLSE Berman hearings
AB 621 (Amnesty for Converting Independent Contractor Drayage Drivers to Employees)
Senate Bill 588 (Labor Commissioner's Enforcement of Judgments)
Assembly Bill 1513 (Hourly Pay for Rest and Recovery Periods for Piece-Rate Workers)
We've written twice recently, here and here about per diem disputes between motor carriers and equipment providers. This issue heated up over the fall and winter of 2014-2015 when many disputes were submitted to arbitration by the motor carriers. According to a report from the Journal of Commerce this past May 2015, as of May 11, 2015, the Intermodal Association Of North America (IANA) had received 109 arbitration requests from motor carriers on the West Coast challenging per diem fees. This was about ten times the normal rate.
With the recent announcement that the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) have reached a tentative agreement to the on-going labor dispute on the West Coast, the issue becomes how to clear the tremendous backlog of containers in the Ports of Long Beach and Los Angeles. Estimates are that the backlog will take 2-3 months to clear depending on how many shifts the ports run.
Every year trucking companies in Southern California routinely pay thousands even tens of thousands of dollars in "per diem" charges to equipment providers in the Ports of Long Beach and Los Angeles. These charges accrue on a daily basis for late returns of empty containers. Since the Fall of 2014, however, the frequency and amount of the charges has soared as port congestion has made it difficult and sometimes impossible to return the containers on time. Motor carriers are now often facing hundreds of thousands of dollars in per diem charges accrued over the course of a few short weeks this Fall.