Pac 9, Teamsters Agree to End Dispute Over Drivers

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By Rhonda Smith

May 5 — Pacific 9 Transportation Inc. and the International Brotherhood of Teamsters have agreed to end their protracted labor dispute and work together to assist striking drivers, they said May 5 in a joint statement, nine days after the company filed for Chapter 11 bankruptcy protection.

At the core of the labor dispute was the question of whether the drivers, who haul goods from the ports of Los Angeles and Long Beach, Calif., to retailers' warehouses and distribution centers, were independent contractors or Pac 9 employees.

The parties said in the statement that they've reached “a global agreement that allows the company to modernize operations by converting all owner-operators to employee drivers, providing a clear pathway for drivers to consider union representation in a neutral environment.”

The drivers, who aren't represented by a union for collective bargaining purposes, have been working with the Teamsters to secure representation.

In July 2015, they launched an indefinite strike against Pac 9, saying the company continued to classify them as independent contractors instead of employees even though Pac 9 agreed in a settlement overseen by the National Labor Relations Board to classify them as employees (55 DLR A-10, 3/21/14).

“This agreement effectively ends the drivers’ strike that began in July 2015 and allows the company and its valued customers to move forward in confidence that there will be no further interruption in the movement of customer cargo,” the statement said. “Pac 9 management and the drivers will work collaboratively to rebuild and stabilize the workforce to provide a high level of service to company customers.”

Bankruptcy Poses New Questions

Pac 9 filed for Chapter 11 bankruptcy protection April 26 (Pacific 9 Transportation Inc., Bankr. C.D. Cal., No. 2:16-bk-15447, bankruptcy petition filed 4/26/16).

This leaves open the question of whether 38 short-haul drivers for Pac 9 will receive nearly $7 million in back wages that the California Labor Commissioner's Office in December ordered the company to pay them in compensation for unpaid minimum wages, expenses improperly deducted from their paychecks, out-of-pocket costs and missed meal and rest breaks (246 DLR A-1, 12/23/15).

The order was related to the state labor officials' decision that the drivers were misclassified as independent contractors.

Amnesty Offered to Companies Misclassifying Drivers

On a related matter, the Labor Commissioner's Office May 5 announced that it is accepting applications for the state Motor Carrier Employer Amnesty Program from eligible commercial trucking companies that provide drayage services at any California port.

“For a limited time, the voluntary program allows qualifying companies to reclassify their drivers as employees and avoid liability for misclassifying them as independent contractors,” the notice states. The amnesty program ends Dec. 31.

“The sheer number of claims filed and wages awarded to misclassified port truck drivers over the last several years demonstrates a significant problem in the industry,” Labor Commissioner Julie A. Su said. “Worker misclassification is a form of wage theft as it denies workers all the rights and benefits of employee status. This amnesty program provides an opportunity for motor carriers to remedy these problems and correct past abuses.”

Since 2011, port truck drivers have filed 799 wage claims with the state Labor Commissioner’s Office, the notice said, for employee misclassification as well as for seeking reimbursement for unlawful deductions and expenses.

The California labor commissioner has awarded more than $35 million to misclassified port truck drivers in 302 cases, state officials said.

To contact the reporter on this story: Rhonda Smith in Washington at

To contact the editor responsible for this story: Susan J. McGolrick at

For More Information

Text of the bankruptcy petition is available at and the labor commissioner's announcement at

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