News & Commentary

September 26, 2018

California Governor Jerry Brown just signed a new law holding retail companies jointly liable for labor violations suffered by truckers who are directly managed by port trucking providers. The legislation follows growing awareness of rampant labor abuse in trucking. Last year, a USA Today investigative series documented how big box retailers like Target and Costco contract with port trucking providers in Los Angeles and Long Beach that exploit drivers, who are often immigrants with limited English proficiency. Many of these companies force drivers to work around the clock and pay them far less than the minimum wage. When drivers can’t continue the meeting harsh, illegal demands, companies may seize their trucks — and refuse to return the payments drivers make towards owning them. USA Today found over $40 billion in labor judgments against just the companies that they profiled, but discovered that companies would flout the judgments by shuttering the companies and opening under another name. California’s new law tackles this problem by blacklisting trucking companies that ignoring labor judgments and holding retailers liable when they turn a blind eye.

This summer’s Epic Systems decision, which cemented employers’ power to enforce class-action waivers and arbitration agreements, is already affecting workers’ lawsuits. Yesterday, the Ninth Circuit ruled that Uber can force drivers into individual arbitration, voiding an attempt by thousand’s of drivers to join in a class-action suit against the company and frustrating a class-action suit over driver classification. Workers’ rights advocates have been sounding the alarm over arbitration for years: a comprehensive study by the Economic Policy Institute found that  employees are much less likely to win in arbitration than in a court of law. The ruling highlights the ways that arbitration can disadvantage workers, but drivers haven’t lost yet. As OnLabor’s own Charlotte Garden told Bloomberg, “the legal landscape for California drivers has improved, because the California Supreme Court recently adopted a relatively employee-friendly test” to address classification of gig workers.

On that subject, the Trump Labor Department is considering changes to regulations over worker classification of gig workers and other independent contractors. Secretary of Labor Alexander Acosta told Bloomberg in an interview that the Department intends to take a more “business-friendly approach” to classification. The Department is focusing on revamping the joint employer rule first, Acosta claimed, then plans to turn to classification. Read OnLabor’s discussion of the proposed Joint Employer rule here and here.

Tesla’s ongoing NLRB trial is providing an inside look into how the company fought factory workers’ attempts to unionize with the United Auto Workers last year. Emails revealed yesterday at the trial showed that a senior human resources officer at Tesla Inc. emailed CEO Elon Musk suggesting that the company promote pro-union employees to prevent them from organizing, writing “I am confirming now with Legal that if they join the Safety team then they would then be considered part of management and not eligible to advocate for a union.” Musk responded enthusiastically. Another Tesla, Inc. employee testified that Musk summoned him into a meeting to attack the union, saying that it UAW would leave worker’s without a voice. Tesla’s defense will begin today; the company’s attorneys will address an NLRB complaint alleging that Tesla violated federal labor law by restricting employees from organizing, retaliating against pro-union workers, and tried to prevent workers from discussing safety issues. The trial follows a string of news about worker safety issues at Tesla’s manufacturing plants, which are also under investigation by California’s Division of Occupational Safety and Health (Cal-OSHA).


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