Pacer Cartage must pay more than $2 million in back pay to seven illegally misclassified port truckers, according to a court decision handed down on Jan. 28 by San Diego Superior Court Judge Jay Bloom.
Bloom upheld an earlier finding by the California Labor Commissioner’s Division of Labor Standards Enforcement from April 2014. Scores of such cases have been decided, by DLSE, but have not come to court.
Because Pacer was appealing the earlier ruling, the burden of proof lay on it—a burden that it failed to meet.
“The key issue in this case, as noted, is who had control,” Bloom wrote. “From the evidence, it appears that Pacer had the control.”A key aspect of the case involved a complicated leasing arrangement from a Pacer Cartage affiliate corporation, put in place when the ports’ Clean Trucks Program went into effect.
“Pacer presented testimony through its witnesses and experts that painted a rosy scenario of venture capitalists who could profit through this lease arrangement as independent contractors,” Bloom wrote in his decision. “However, this scenario was not supported by the evidence. [T]hey say the truck left the dealer, it had a negative equity situation. Moreover, when the drivers left Pacer there was no evidence they had any equity built up that was returned to them. In most cases, they just turned over the keys.”
“This is a tremendous victory in the fight against misclassification,” said plaintiff’s lead council Alvin Gomez. “We believe that these decisions, coupled with the lawsuits that we have recently filed and those we intend to file in coming weeks, will force the drayage industry to make long overdue changes in their business practices to comply with state and federal labor laws.”
–Paul Rosenberg, Senior Editor