Guest Post: Truck Driver Rights and Recent California Rulings

Jon Zerolnick is the Research Director at LAANE, the Los Angeles Alliance for a New Economy, where he has authored a number of reports concerning port truck drivers.

Truck drivers in California’s ports have been fighting for decades for rights most workers take for granted: the right to a minimum wage, the right to proper employee classification, and especially the right to form a union. In the wake of the deregulatory wave of the 1980s, downward pressure on trucking companies led to destructive competition, which led first to union-busting, and then to the widespread misclassification of truck drivers as independent contractors. This, despite the fact that legal and factual analyses have shown – theoretically in 2010 and based on a wave of then-recent rulings in 2014 – that these truck drivers are subject to the control and direction of the trucking companies they haul for. (Full disclosure: I was a co-author of the 2014 report.) Under any legal test, these are employee drivers being deprived of their employee rights; their condition has been compared to that of sharecropping and involuntary servitude.

As was recently reported in these pages, the California Supreme Court just ruled (in Iskanian v. CLS Transportation Los Angeles, LLC) that (quoting OnLabor’s analysis) “arbitration agreements with mandatory class action waivers are enforceable within the state.” This is the latest in a line of post-Concepcion cases concerning arbitration. Last year, the California Supreme Court ruled (in Sonic-Calabasas A, Inc. v. Moreno) that the Federal Arbitration Act preempted a state rule prohibiting an employer from requiring an employee to waive her rights before the Labor Commissioner and instead arbitrate wage claims.

These two rulings are a blow to workers who attempt to assert their rights, and may fall hard on port truck drivers, who are regularly required to sign contracts that waive many such rights. In the past few years, truck drivers have attempted to assert their rights by filing hundreds of wage and hour claims with the state Labor Commissioner. (In order to adjudicate a wage claim, the Labor Commissioner’s office must first establish the claimant as a true employee.) Courts in California may allow the putative employers to shift these claims from the agency (the Division of Labor Standards Enforcement) to arbitration.

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Today’s News and Commentary — July 31

The Wisconsin Supreme Court has upheld the state’s 2011 law effectively ending collective bargaining rights for public employees, known as Act 10. Writing for the majority, Justice Michael Gableman said, “No matter the limitations or ‘burdens’ a legislative enactment places on the collective bargaining process, collective bargaining remains a creation of legislative grace and not a constitutional obligation.”

The NLRB’s decision to treat McDonalds as a joint employer “bewilders franchisors,” according to the New York Times. Labor experts predict that the decision may lay the foundation for an expansive ruling covering companies that use temporary agencies or subcontractors. Industry trade groups plan to ask federal courts to overturn the NLRB’s ruling.

The New York Times reports that city officials and union leaders are planning to encourage municipal workers to use walk-in clinics and buy generic drugs to cut healthcare costs. Labor agreements negotiated in the spring included wage increases in exchange for savings in healthcare.

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Today’s News and Commentary — July 30

News outlets around the country have reported on the decision of the NLRB’s general counsel to treat McDonald’s as a joint employer with its franchises.  The Washington Post writes that the decision could have “potentially far-reaching implications for the ability of millions of low-wage workers to join a union.”  The Wall Street Journal, meanwhile, reports that “McDonald’s vowed to fight the decision.”

In what the Los Angeles Times calls a “stinging defeat” for the administration of Mayor Eric Garcetti, the Los Angeles Employee Relations Board voted unanimously to order the City Council to rescind a 2012 law reducing pension benefits for new city employees.  A lawyer for the Coalition of L.A. City Unions said that the decision “shows the city could not unilaterally impose changes in pension benefits on its workforce.”

In the midst of the Metropolitan Opera’s “worst labor crisis in years,” the New York Times reports on a history of labor disputes at the Met going back as far as 1906.  The contracts for 15 unions working at the opera expire this week, and the Times reports that “while both sides say they hope to avoid a lockout, the chances of reaching deals by Friday appear to be slim.”

As the start of the college football season approaches, the Washington Post reports that the effort to unionize the Northwestern University football program remains front and center.  Coach Pat Fitzgerald “championed the team’s unity,” even as he discussed the divided opinions on his team regarding the unionization question.

Guest Post: What it Means that McDonald’s is Responsible for its Franchises

Catherine Fisk is the Chancellor’s Professor of Law at University of California, Irvine. She is the author of the award-winning book,Working Knowledge: Employee Innovation and the Rise of Corporate Intellectual Property, 1800-1930.”

The action of the General Counsel of the National Labor Relations Board in determining that unfair labor practice charges against McDonald’s can proceed is very important but nowhere near as revolutionary as critics of the decision suggest. The General Counsel determined in several of the scores of cases pending before it involving McDonald’s workers that McDonald’s exercises sufficient control over the working conditions at McDonald’s restaurants operated by franchisees that workers who were fired allegedly in retaliation for asserting their rights to higher pay and to unionize can assert claims against the McDonald’s corporation as well as against the company that owns the franchise.

In another case currently pending before the NLRB involving a Browning-Ferris Industries recycling plant in California, workers are asking the Board to determine that when the employees of a business unionize, both the temporary staffing agency that is their employer on paper and the business that receives and supervises their labor must bargain with the union when meaningful bargaining over labor conditions cannot occur without both there. At some point in the next several months, the Board may decide the Browning-Ferris case which will give some indication whether the action of the General Counsel in the McDonald’s case will be the Board’s official interpretation of the obligations of employers under the NLRA.

Unions and other employee activists trying to combat low wages have focused on the joint employer issue because they see it as essential to change working conditions. When a company outsources the hiring and supervision of the workforce to a labor contractor or to a franchisee but maintains control over the operation of the business, workers find that it is essential to involve the lead company (McDonald’s or Browning-Ferris) in the negotiation and enforcement of workplace rights. Without the lead employer at the bargaining table or responsible for unfair labor practices, employees and the labor contractor or franchisee cannot raise wages or improve working conditions. If a franchisee increases wages at McDonald’s, the franchisee will be unable to meet the exacting standards imposed by McDonald’s about the ratio of staff to customers on an hourly basis and the profit margin that McDonald’s demands of all its franchisees. McDonald’s will terminate the franchise and will find another person willing to operate the franchise on McDonald’s terms. Because McDonald’s controls minute details of the operation of its restaurants nationwide, it makes sense for the law to recognize that the corporation that actually controls the conditions and the pay be held jointly responsible for the low wages and lousy working conditions.

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Today’s News and Commentary – July 29

The California State Supreme Court recently issued a decision that arbitration agreements with mandatory class action waivers are enforceable within the state. In Iskanian v. CLS Transportation Los Angeles, LLC (decided June 23, 2014), the Court struck its earlier decision in Gentry v. Superior Court. Gentry had found that a class action waiver could “undermine the vindication of [. . .] employees’ unwaivable statutory rights” and thus be unenforceable. The California Supreme Court held in Iskanian that following Concepcion, the Federal Arbitration Act preempted the Gentry rule. The court further adopted the Fifth Circuit’s reasoning in D.H. Horton, rejecting an argument that class waivers are invalid under the National Labor Relations Act. (OnLabor has covered D.H. Horton here and here.) The court did, however, carve out an exception for representative actions brought under California’s Private Attorneys General Act of 2004 (“PAGA”), holding that employers cannot force employees to waive their right to bring representative PAGA actions in any forum. The decision can be found here and more background on the case can be found here.

The Washington Post reports that the National Basketball Players Association, the union for NBA players, has chosen Michele Roberts as their new president. Roberts, formerly of the law firm Skadden, Arps, Slate Meagher and Flom, will become the first woman to head a major sports union.

The L.A. Times reports that unaccompanied immigrant children apprehended at the U.S. border are being rushed to see immigration judges – in some cases, the immigrants are given less than 48 hours to appear in court. Though some argue this time frame is beneficial, other immigrant advocates say the “shortened time frame does not give recently arrived immigrants a fair chance to find a lawyer and build a successful case.”

In international news, the Wall Street Journal reports that Foxconn has confirmed the death of an employee in its Shenzhen, China factory. The employee’s cause of death is still under investigation. The WSJ also reports that South Africa’s biggest metalworkers union has accepted a wage offer to end a month-long strike. Over 200,000 members of the National Union of Metalworkers will receive a 10% salary increase over three years.


Today’s News and Commentary – July 28

The New York Times’s labor correspondent, Steve Greenhouse, published an article discussing fast food workers’ weekend convention in Addison, IL. He details how, with the support of the S.E.I.U., the “Fight for Fifteen” campaign has shifted to encompass both wage increases and unionization. Of S.E.I.U.’s interest in the campaign, Janice Fine, a professor of labor relations at Rutgers university and guest contributor to this blog, wrote, “My sense is there’s been a recognition on the part of the S.E.I.U. that to get the labor movement out of the very deep rut it’s in, it’s going to take more than an individual local organizing drive — that this is a moment to do a large-scale, high-visibility effort to alter the climate for labor.” The article also highlights a suit that fast food workers recently filed with the NLRB, where the fast food workers are pushing the general counsel to declare McDonald’s a joint employer of restaurants run by its franchisees. Such a finding would expand the scope of the workers’ unionization drives. The Chicago Tribune offered further details on the convention, where Mary Kay Henry, international president of the S.E.I.U., spoke.

PublicSource reports that over 13,000 disabled Pennsylvanians are legally earning an average of only $2.40 an hour. PublicSource analyzed 1,600 pages of reports provided by the federal government after the Pennsylvania Department of Labor and Industry refused to release them. The piece highlights a debate as to whether a federal program that allows employers to pay disabled individuals sub-minimum wages to perform menial tasks leaves them trapped in dead-end jobs or provides them with necessary job training.

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