The L.A. Ports Strike

Published September 1st, 2013 -  - 09.01.131


The Los Angeles Times reported that on Monday, August 26, up to 30 drivers went on strike against local trucking firm Green Fleet Systems, which services the Ports of Los Angeles and Long Beach—combined the largest port complex in the United States and one of the largest in the world. The strike, timed to coincide with labor actions in other logistics and fast food industries, was prompted by worker complaints of employer interference in efforts to unionize, which included employer pressure to sign anti-union agreements and promises of better conditions without the union—both classic union-busting strategies.

At the Los Angeles-Long Beach ports, there are over 16,000 short-haul or “drayage” truckers who take containers unloaded by incoming ships to local intermodal railheads and regional distribution centers. Green Fleet employs about 90 truckers, which makes it unique among its drayage peers, 90 percent of which have no employees but rather operate through independent contractors. The independent contractor system of port trucking, ushered in after the 1980 Motor Carrier Act deregulated the trucking industry, has by most accounts had a significant negative impact on the work conditions of port truckers (and the trucking sector overall). A 2001 study by Dale Belman and Kristen Monaco found that trucker wages fell by 21 percent from 1973 to 1995, and that one-third of the decrease was attributable to deregulation. Independent contractors purchase or rent their own trucks and are paid by the load or trip, rather than by the hour. This insulates trucking companies from trucker liability and reduces labor costs by eliminating the need to pay employment taxes and benefits—and makes it impossible to organize them under the National Labor Relations Act, which does not cover independent contractors. Indeed, it is a violation of antitrust law for independent contractors, who are considered business owners, to engage in collective action. Partly as a result, truckers who act as independent contractors face significant economic hardship: because they have to pay for their own maintenance and do not get paid for lengthy wait times, their effective wage rate has been found to be less than $10 per hours, with some studies finding it to be well below that. For this reason, critics of the port trucking system have labeled port trucks “sweatshops on wheels.

Against this backdrop, the Green Fleet strike raises an interesting question: Why attempt to organize one of the few trucking companies that actually hire drivers as employees? The L.A. Times suggests one reason: that unionizing drayage trucking is a crucial step toward the bigger prize of organizing workers through the logistics chain, particularly warehouse workers. A unionized short-haul trucking fleet responsible for shipping imported goods to the massive regional warehouses of Walmart and other retail giants could create more leverage to unionize those workers—perhaps leading someday to a campaign against the retail giants themselves.

This seems right, but begs the question of why Green Fleet? Organizing 90 of 16,000 truckers isn’t going to create leverage over the logistics chain. Perhaps one part of the answer lies precisely in the anomalous market position of Green Fleet as a firm that directly employs its drivers. There are a handful of these employer firms that have now accepted union representation. Last year, the Toll Group reached a widely touted agreement with the Teamsters to unionize its port truckers in Los Angeles and New Jersey. The campaign against Green Fleet is part of a broader strategy to get those employer firms under union contract—and thus show that, contrary to dire industry warnings, unionized trucking firms can still be competitive.

Another part of the answer to “Why Greenfleet?” relates to the larger labor movement effort to address the other 90 percent of drayage trucking firms—i.e., those that use nominal independent contractors. I say “nominal” because labor advocates argue that there is widespread misclassification—and there are pending lawsuits against port trucking companies alleging that they have improperly labeled truckers as contractors when in fact they are controlled as employees. This, too, is part of an overall strategy to raise the cost of contracting in order to promote employee conversion and thus create an opportunity to increase union density. If more companies understand that improperly classifying drivers as employees will result in costly litigation, then some may choose to properly designate them in the first instance—and thus again open opportunities for unionization. The more successful unionized trucking companies there are, the weaker industry’s argument about the anticompetitive effect of employee conversion becomes.

As this suggests, the campaign to unionize Green Fleet is part of a much larger campaign to change the underlying industry structure of port trucking to permit unionization. Indeed, this strike is the latest in a nearly decade-long effort by the Teamsters, in collaboration with national Change to Win leaders and local community-based partners, to make inroads in the port trucking industry. The Teamsters, of course, used to be synonymous with the trucking industry: nearly half of U.S. truckers were unionized in the late 1970s. Now, the national figures are less than a quarter and the port figures are near zero. It has long been a major Teamster goal to reverse this slide.

The ports have been eyed as a strategic possibility precisely because they are primarily city entities—that is, they are owned or under the control of city governments and thus subject to mobilization to change city policy. This is an important lever—and one used in Los Angeles to pass a landmark policy in 2008 requiring all port trucking companies to enter into concession agreements with the port—essentially private contracts permitting truck entry onto port property. This policy, labeled the Clean Trucks Program, was the culmination of two years of impressive organizing by the Coalition for Clean and Safe Ports, a labor-environmental (or “blue-green”) alliance led by the Los Angeles Alliance for a New Economy—also known as LAANE. The program, passed by the Los Angeles Board of Harbor Commissioners and approved by city council, conditioned the concession agreements on two basic requirements: first, that trucking companies (with port financial subsidies) agree to gradually convert their fleets to low-emissions vehicles and that they agree to convert all of their drivers to employees. Under this new program, the environmental movement would achieve one of its long-standing goals—“greening” the port—while the Teamsters could pursue unionization of the newly converted employees. It was a win-win designed to address the structural economic problem contributing to port pollution: low-paid independent contractors did not have the resources to maintain and upgrade their trucks to current environmental standards. The port was thus where old, dirty diesel trucks went to die. The Clean Trucks Program would take maintenance out of the drivers’ hands, making the companies internalize the costs, thus creating a sustainable foundation for clean trucking over time. A compelling concept, brilliantly executed.

But it was not meant to be. Despite the impressive local policy win, the program was quickly swept into court, subject to a lawsuit by the American Trucking Association (ATA). The case bounced back and forth between the district and appellate courts in the Ninth Circuit. At issue was whether the Clean Truck Program was preempted by the Federal Aviation Administration Authorization Act, which states that no local government may enact a law “related to a price, route, or service of any motor carrier.” The employee conversion provision was preliminarily enjoined, but after trial held to be a valid exercise of local government power under the so-called “market participant” exception to the preemption doctrine. The Ninth Circuit disagreed and reversed the trial court on that point. The case went to the Supreme Court on other grounds and last term, in a unanimous decision authored by Justice Kagan (ATA v. City of Los Angeles), the court struck down two additional minor provisions of the Clean Truck Program. However, by this point, the dream of employee conversion and possible unionization on a mass scale had already all but died. The city did not contest the invalidation of the employee conversion provision on appeal to the Supreme Court, so that chapter had already been closed. The one silver lining of the Court’s decision was that it did not touch the underlying doctrinal basis for local government efforts to intervene in labor issues through the market participant exception to federal preemption. But that was likely cold comfort to all of those who had worked so hard to get the Clean Truck Program passed in the first instance.

It was also cold comfort to the truckers themselves, who now find themselves in a new box: obliged to acquire and maintain new, more expensive low-emission trucks (that part of the program was not enjoined), yet still in the degraded economic position of independent contractors. The campaign thus succeeded in producing a “green fleet” at the port—Los Angeles now boasts one of the cleanest ports in the world. Yet the truckers, despite the labor movement’s monumental effort, still may have to bear the costs. The Green Fleet campaign is thus an aptly named coda—and perhaps a new beginning—to the ongoing struggle to transform port trucking.

Scott Cummings is Professor of Law at the UCLA School of Law, where he is writing a book about the role of law in the Los Angeles labor movement.

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