Understanding the Clean Truck Litigation Part V: 5 years, millions - - PowerPoint PPT Presentation

Understanding the Clean Truck Litigation Part V:

5 years, millions of dollars, and tens of thousands of pages later... And And wo worke rker r misclassi misclassificati fication

• n

Pres Presented ented by by Cameron Cameron W.

• W. Roberts

Roberts Rob Roberts erts & Keha & Kehagiaras giaras LLP LLP

THRE THREE E YEARS YEARS AND AND COUN COUNTI TING: NG:

“This is going to go

• n for years.”

Ju Judg dge e Har Harry ry Pre Prege gers rson

• n,

Ninth Ninth Cir Cir.

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A YEAR AGO …

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WHERE WHERE ARE WE ARE WE NOW? NOW?

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WHERE WHERE ARE WE ARE WE NOW? NOW?

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WHERE WHERE WE ARE WE ARE NOW? NOW?

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IN IN THE THE BEGINN BEGINNING NG . . . . .

 In N In Nove

• vembe

mber r 20 2006 06, , the the Ports voted Ports voted t to

• ap

appro prove ve the the Sa San n Pe Pedro dro Bay Bay Po Ports rts Cl Clea ean Ai n Air r Acti Action

• n P

Plan lan (“CAAP”).  The CAAP’s general goal is to reduce pollution in the the Ports an Ports and su d surroun rrounding ding are areas, there as, thereby by red reduc ucing ing the the atten attenda dant h nt hea ealth ri lth risk sks. s.  One co One compo mpone nent nt of the CA

• f the CAAP

AP is the is the C Clean lean T Truc ruck k Program (“CTP”).

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THE THE CONCE CONCESSIO SSION N AGREE AGREEMENT MENT

 MAYOR VILLARAIGOSA LAUNCHES LANDMARK CLEAN TRUCK PROGRAM TO CLEAN LOS ANGELES' AIR  Bans over 10% of port trucks

• r 2000 “dirty-diesel” trucks,

removing over 350 tons of harmful port-related emissions from Los Angeles' air.

 When fully implemented in

2012, the Clean Truck Program takes over 16,000 dirty-diesel trucks off the road, slashing harmful truck emissions by 80 percent.

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MORE MORE POL POLITICS ITICS – LAB LABOR OR & & THE THE GOVER GOVERNOR NOR Tea Teamst mster ers s also also wor worke ked d tire tireless lessly ly to to re retu turn rn Br Brown

• wn to

to the the go gove vern rnor

• r's

's man mansion sion. . Teamsters say: Brown “a lifelong public se serv rvan ant t . . . . . . suc succe cess ssfull fully y foug fought ht to to pro prote tect ct wor working king famil families ies an and co d cons nsume umers rs, , includ including ing po port rt dr driver ivers s fight fighting ing ag again ainst st tr truc uckin king g co compa mpany ny ab abus uses es.”

• Te

Teams amster ter pre press ss relea release se. .

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THE THE CONCE CONCESSIO SSION N AGREE AGREEMENT MENT

Th The e Po Ports rts of Lo

• f Long

ng Beac Beach an h and d Lo Los Ange s Angeles les ha have ve ea each ch ad adop

• pted

ted a a CTP an CTP and d a Conc a Concess ession ion Agre Agreem emen ent (t t (the he “Agreements”). Th The e Agree Agreemen ments ts req required uired motor carriers motor carriers to c to com

• mply with

ply with a a nu numbe mber r of prov

• f provisi

ision

• ns.

s. Fa Fail ilure ure t to

• co

comply mply wou would r ld resu esult lt in ba in barri rring ng the the motor motor ca carri rrier er from from en

• entry. T
• try. The

he ATA ATA fil filed ed a a lega legal l ch challeng allenge e to the to the Agree Agreemen ments. ts.

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TRIAL COURT: HIST TRIAL COURT: HISTORY, STATUS ORY, STATUS

 ATA ATA fil filed ed ac action tion in in fed feder eral al co cour urt t on

• n July

July 28 28, , 20 2008 08.  Tw Two

• da

days l ys lat ater er, ATA , ATA fil filed ed a mot a motion ion for for a pr a prelimi elimina nary ry injunc injunction tion i in n or

• rde

der r to to stop stop the the i impleme mplement ntat ation. ion.  Judge Snyder’s September 9th order denied ATA’s request for a pr a prelimi elimina nary ry injunc injunction tion.  On On re reman mand, the d, the Court Court issued issued an or an orde der r en enjoining po joining portion rtions of s of th the Agre e Agreeme ement nts. s.  Port Port of Lo

• f Long

ng Bea Beach ch settled

• settled. NRDC

. NRDC ch challeng allenged ed th the set e settleme tlement nt.  Tri Trial al is is ove

• ver.
• r. Septe

Septembe mber r 10 10, 2 , 201 010.

• 0. Cou

Court rt en ente ters FINAL rs FINAL JUDG JUDGME MENT NT in in favo favor of r of th the Port of e Port of Lo Los Ange s Angeles, NRDC, les, NRDC, Si Sier erra ra Club Club and Co Coali lition tion fo for r Clea Clean Air. Air.  ATA filed an appeal of the trial court’s FINAL ORDER.  Ninth Ninth Circuit Circuit op

• pinion issued

inion issued on Septe

• n Septembe

mber r 26 26, , 20 2011 11.

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APPE APPEAL: AL: HISTO HISTORY, RY, STAT STATUS US

The ATA has appealed the District Court’s order denying the injunct the injunction ion to th to the e U.S. U.S. Cour Court t of A

• f Appeals

ppeals for t for the he Nint Ninth h Cir Circuit. cuit. The N The Ninth inth Cir Circuit cuit agreed agreed with with the A the ATA TA and reman and remanded ded the case the case back to back to the D the District istrict Cour Court. t. The D The District istrict Cour Court t issued issued an order an order following following the r the remand. emand. The A The ATA TA filed filed a second appeal a second appeal as to as to the or the order der following following

• remand. The Ninth Circuit denied the ATA’s second

appeal. appeal. The The AT ATA A has f has filed iled a a thir third d app appeal, eal, this is this is an a an appe ppeal of al of the the trial court’s FINAL ORDER.

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THE TRIAL COURT’S FINAL ORDER

The The Cou Court rt he held: ld:

The FAAA The FAAA Act Act ap applies. plies. Cert Certain ain pr provisions ar

• visions are Not

e Not sub subject ject to price to prices, ro s, rout utes an es and d ser services in vices in th the FAAA e FAAA Act: Act:

Mainte aintena nanc nce e pro provi visi sion

• n;

Placa Placard pro rd provi visi sion

• n;

Fina Financ ncial ial ca capa pabili bility; ty;

Subject to the “Safety” Exception:

Mainte aintena nanc nce e pro provi visi sion

• n;

Placa Placard pro rd provi visi sion

• n;

NOT NOT sub subject ject to FAAA to FAAA Act Act be beca cause use th the Port of e Port of Lo Los Ange s Angeles les is is acting ting as s a mar market pa t partic rticipa ipant: t:

Employee Employee mand mandate ate Park Parking ing

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PRICE, ROUTE PRICE, ROUTE, OR , OR SERVICE SERVICE

Fe Fede dera ral l Aviat Aviation ion Administ Administra ration tion Aut Autho horization rization Act Act Pre Preemp emption tion is is th the ge e gene nera ral l ru rule. le. 49 49 U.S.C. U.S.C. § 14501(c)(1): A State “may not en enac act t or

• r en

enforc force a e a law, law, re regu gulation lation, , or

• r ot
• the

her r pr prov

• vision

ision ha having ving th the forc e force e an and effect d effect of l

• f law

aw re relate lated d to to a pr a price, ice, ro rout ute, e, or

• r se

serv rvice ice or

• r an

any y mo moto tor r ca carr rrier ier . . . . . . with with re resp spec ect t to to th the e transportation of property.”

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MARKE MARKET T PART PARTICIPATI ICIPATION ON

If state action is proprietary, rather than regulatory, such action is not generally subject to statutory preemption. The mark The market et part participant icipant test test does does not t not turn urn on whether

• n whether

the stat the state e or local

• r local government

government is is a purcha a purchaser ser or seller

• r seller of
• f

the good the goods s and services and services at at issue. issue. The Court rejected ATA’s contention that the Port itself must must part participate icipate direct directly ly in in the dr the drayage ayage market market. The Port’s participation in the port services market is sufficient sufficient. Concession Agreement was a “business necessity,” in

• rder
• rder to eliminate

to eliminate evident evident obstacles

• bstacles to PO

to POLA LA growth. growth.

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THE THE ATA ATA INJUCTION INJUCTION – STAY STAY

While the appeal is pending, the ATA asked the court to enjoin:

Employee mandate; Off street parking fees; Financial responsibility.

The court only enjoined:

Employee mandate.

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LONG LONG BEACH BEACH SET SETTLEM TLEMENT ENT

“The (CAAP) program that has been highly successful in reducing air pollution . . . The NRDC’s real objection to our program has nothing to do with clean air. … (it is a) Teamster … campaign to unionize port truckers.”

• Richard Steinke, Port of Long Beach

“ATA has always strongly supported the environmental objectives of the Port and supports strict compliance with and adherence to all safety and security laws and regulations.”

• ATA President and CEO Bill Graves

“The Port of Long Beach violated the public trust … approved a worthless settlement … they ran away from a fight.”

• David Pettit, NRDC

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On On De December cember 29 29, 200 2009, pla plaintiffs intiffs Natural Natural Re Resources

• urces Defense

Defense Counc

• uncil

il Inc

• Inc. (“NRDC”) and

and Sierr Sierra Club Club filed filed their their verified verified petition petition for for writ rit of

• f

mand mandate ate under under th the Californi alifornia Environmen Environmental tal Qu Quality ality Act Act (“CEQA”) and and complaint complaint against against defendants defendants.

NRDC NRDC v. PORT

• v. PORT OF

OF POLB POLB

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The The Co Court urt only nly ruled ruled that that an an initial initial study study was was requ required ired under under 14 14 C.C.R. § 15063 15063, and and this this rulin ruling do does es no not resolv resolve whether whether defe defendants ndants were were required required to to conduct conduct an an EIR EIR regarding regarding the the impact mpact

• f
• f

the the settlemen settlement agreement agreement. Hearing Hearing on

• n the

the ne next xt action action by by NR NRDC DC is is sch schedule eduled Decemb December er 3, 20 2012 12 at at 1:00 00 PM PM.

NRDC NRDC v. PORT

• v. PORT OF POLB

OF POLB

WHAT WHAT ARE ARE THE THE UNDER UNDERLYING LYING INTERES INTERESTS? TS?

Increase the Ports’ capacity Red Reduce uce emiss emissions ions Improve Improve hea health lth Polit Politics ics Tax Taxes es – Rev Revenu enue Costs Costs of

• f operati
• peration
• n

Labor Labor

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LITIGATION: LITIGATION: KEY KEY PLAYE PLAYERS RS

Por Port t of Lon

• f Long

g Bea Beach ch Po Port rt of Lo

• f Los

s An Ange geles les ATA ATA U.S. U.S. Gov Gover ernme nment nt Int Inter eres este ted d Th Third ird Pa Part rties/ ies/Amic Amici i Cu Curia riae

• a. Enviro
• a. Environme

nment ntal al Inte Intere rest sts

• b. Shippe
• b. Shippers

rs

• c. La
• c. Labo

bor

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SAMP SAMPLING LING OF AMICI OF AMICI CURIAE CURIAE

Nat Nationa ional l Ret Retail ail Federati Federation

• n

Nat Nationa ional l Right Right to to Wor Work k Nat Nationa ional l Indu Indust strial rial Tra Trans nsp.

• p. Le

Leag ague ue U.S. U.S. Gov Gover ernme nment nt Sierr Sierra a Club Club NRDC NRDC

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NINTH NINTH CIRCUIT CIRCUIT OPINION OPINION

We We reject reject ATA’s arguments that (1) the concession the concession agreements agreements per se per se affect r affect rates, ates, routes, and services; routes, and services; (2) (2) the market the market parti participant cipant doctrine does doctrine does not apply not apply because because the Por the Port does t does not not “procure” drayage services; and (3) that the Supreme Court’s decision in Castle Castle v.

• v. Hayes

Hayes Freight Lines, Freight Lines, Inc. Inc., , 348 U.S. 348 U.S. 61 (1954) precludes 61 (1954) precludes the the application application of the safety

• f the safety exception to

exception to this this case. case.

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NINTH NINTH CIRCUIT CIRCUIT OPINION OPINION

The The Port Port directl directly y parti participates cipates in in the the market as market as a manager of Port facilities. a manager of Port facilities. In essence, In essence, the co the concession ncession agreements are contracts agreements are contracts under under which the Port ex which the Port exchanges acc changes access ess to to its property for a drayage carrier’s compliance compliance with certain c with certain conditions.

• nditions.

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NINTH NINTH CIRCUIT CIRCUIT OPINION OPINION

In this In this case, case, we are not faced with we are not faced with a a situation situation where the Port is where the Port is managing managing property “in its sovereign capacity,” or imposing imposing restr restrictions ictions unrelated t unrelated to

• its

its business business inter interests ests as as a propert a property y manager.

• manager. As

As the distr the district ict court court recognized, recognized, the Por the Port of t of Los Angeles Los Angeles is is a business a business entit entity, y, operating wholly

• perating wholly

separately separately from the city from the city government government.

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NINTH NINTH CIRCUIT CIRCUIT OPINION OPINION

We ho We hold t ld tha hat t whe when an n an i ind ndep epen ende dent nt State State entity entity man manag ages es ac acce cess ss to i to its ts fac facil ilit ities, a ies, and nd impos imposes es co cond ndit itions ions si simil milar ar to to tho those se t tha hat t wou would be impose ld be imposed d by a by a pri priva vate te land landlord lord in the State’s position, the State may claim the market participant doctrine. … A p A pri riva vate te po port rt own

• wner

er co could uld (an (and d pro proba bably would) bly would) en enter i ter into nto c con

• nce

cession ssion-type type ag agree reemen ments ts wi with th li lice cense nsed d moto motor c r carriers arriers in o in orde rder r to further to further it its s go goals. als. Se See e Boston Boston Harb Harbor

• r,

, 50 507 U. 7 U.S. at 2

• S. at 231

31-32 32. . We We the therefore refore con conclud clude e tha that th t the Po e Port rt ac acted ted i in it n its s pro proprietary prietary ca capa pacity as a marke city as a market t pa parti rticipa cipant when nt when it it d dec ecided ided to en to enter i ter into nto c con

• nce

cession ssion ag agree reemen ments ts.

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NINTH NINTH CIRCUIT CIRCUIT OPINION OPINION

 Financial Capabilit Financial Capability y Provi Provision sion  While t While this his does not does not preclude preclude the pos the possibil sibilit ity y that that the financial the financial capability capability prov provisi ision

• n wi

will eff ll effect r ect rates ates, , rout routes es or s

• r serv

ervices, ices, it it makes makes that possibility “tenuous or remote.” Accordingly, we hold that the financial capability the financial capability prov provisi ision

• n is

is not pr not preempted eempted by by § 14501( 14501(c) c)

• f the FAA
• f the FAAA

A Act Act.  The Maintenance The Maintenance Provi Provision sion  We conclude that We conclude that the maint the maintenance provis enance provision ion was was intended t intended to

• res

respond pond to s to safe afety ty concerns concerns. .  We hold that We hold that Stat State prov e provisi isions

• ns duplicating

duplicating fed federal law eral law may s may stil till l be be genuinely r genuinely respons esponsive ive to s to safe afety ty.  Off Off-Str Street Parking eet Parking Provi Provision sion  The of The off-st street reet parking parking prov provisi ision

• n ser

serves ves the Port’s busines business s inter interest est in in promot promoting ing Port Port secur securit ity y as a mar as a market ket part participant. icipant.  Pl Placa acard rd  The placard provision is genuinely responsive to motor vehicle safety and helps the Port to gather information about the safety

• f drayage truck operations, both on and off Port property.

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The employee The employee-driver driver provision provision is is

 “tantamount to regulation” and thus and thus does not does not fall under the fall under the market market part participant icipant exception. exception.

We We conclude t conclude that, hat, the employee the employee driver driver provision provision seeks seeks to impact to impact thir third d par party ty beh behavior avior unr unrelat elated ed to t to the he performance of the concessionaire’s obligations to the Port Port. . One of the Port’s primary motives in adopting the emp employee driver loyee driver pro provision vision was was to to incr increase stability ease stability in in Port Port drayage drayage by by ensuring ensuring that that drivers drivers were were paid higher paid higher wages. wages. As As a facilities a facilities provider, provider, the the Port Port has has an inter an interest est in in continue continued provision d provision of

• f drayage services,

drayage services, but it but it may may not not

• btain
• btain that

that stability stability by by unilater unilaterally ally inserting inserting itself itself into into the cont the contract ractual ual relat relationship ionship between mot between motor

• r carr

carriers iers and and drivers drivers.

NINTH NINTH CIRCUIT CIRCUIT OPINION OPINION

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THE THE DISSEN DISSENT

 I must dissent from the majority opinion because:  (1) The market participant exception to preemption does not

• apply. Drayage services (not port services) form the relevant

market, and the Port of Los Angeles (the “Port”) acts as a regulator of drayage services.  (2) Even assuming the Port qualifies as a proprietor, the off- street parking provisions are preempted, because they affect parties unrelated to contractual obligations to the Port.  (3) The placard provision is preempted and not saved by the market participant doctrine or the safety exception, because California cannot revoke access to channels of interstate commerce and identification requirements on motor carriers are expressly preempted under 49 U.S.C. § 14506(a).

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FMC FMC - INVEST INVESTIG IGATIO ATION

House House of Representat

• f Representatives;

ives; May May 9, 9, 2012 l 2012 lett etter er to FMC; to FMC;

Dr Drop

• p in employ

in employee ee sa satisfac tisfaction tion; Bullied Bullied st staff; aff; Tre Treat atmen ment t of sta

• f staff

ff th that at ob

• bject

jected ed to to POL POLA A ba ban n on

• n own
• wner

er-operators;

• perators;

Roy Roy Pe Pearso arson n – Robe Robert Bl rt Blair air – Fo Forec recast incre ast increase ased d co cost and st and r red educ uced ed co compe mpeti titi tion

• n.

Spector Spector 360 360

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IS THE IS THE EMPL EMPLOYEE OYEE ISSUE ISSUE REA REALL LLY Y DEA DEAD? D?

OR OR

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WORKE WORKER R MISCLAS MISCLASSIFICATI SIFICATION ON

In 2007, In 2007, US Gov. US Gov. Acct.

• Acct. Office

Office found that found that misclassificatio misclassification n

• f workers as
• f workers as

independent independent contract contractors co

• rs cost

st the United States the United States Government Government $2.72 billion. $2.72 billion.

 Califor California nia surge surge in in mis misclass classificat ification ion incr increa eased sed 2005 2005 -07 to to 54 54 pe perc rcent, t, re reac aching hing 15 15,751 ,751 wo work rker ers s in in 20 2007 07. .  Th The Sta State te of Ca Cali liforn rnia ia wa was s ab able le to to rec recover a

• ver a to

tota tal l of

• f

$1 $11.9 1.9 mil milli lion

• n in

in pa payroll yroll ta tax x ass assess essmen ments, ts, $1 $18.5 8.5 mil milli lion

• n in

in labo labor r co code de cita citation tions, s, and and $4 $40.3 0.3 mil milli lion

• n in

in ass assess essmen ments ts

• n
• n emp

employment loyment ta tax x fr frau aud d ca cases ses.

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THE THE LAW I LAW IN N CALIFORNIA CALIFORNIA

 SB 459 SB 459 - On Oct On October

• ber 9, 2011, Gover

9, 2011, Governor nor Br Brown

• wn signed t

signed the bill int he bill into

• law,

law, and it and it wi will t ll take ef ake effec fect Januar t January y 1, 2012. 1, 2012.  “Unlawful … to engage in the willful willful misclassific misclassification ation of

• f an

an individual as individual as an independen an independent cont t contract ractor

• r and/or

and/or charging an charging an individual w individual who ho has been w has been willfully mis illfully misclass classified ified a fee a fee, or , or making making any deduct any deductions ions from compensat from compensation ion for any pur for any purpose, pose, wher where the e the employer employer would hav would have been in violat e been in violation ion of the law i

• f the law if the individual

f the individual had not been misclassified.”  “Knowingly advis advises es an employer an employer t to

• tr

treat eat an individual as an individual as an an independent contr independent contractor actor to av to avoid employee

• id employee st

status atus for t for that hat individual s individual shall hall be jointly be jointly and sev and severally erally liable wi liable with t th the he employer employer if if the individual is found not to be an independent contractor.” (T (This does his does not include at not include attor torney ney author authorized ized t to pract

• practice

ice law law in in Calif California)

• rnia).

.

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SB459 RECORDS SB459 RECORDS & & PEN PENALTIES ALTIES

 Requires … retention of specified records related to all independent contr contractor actors s ret retained to ained to make thos make those recor e records ds available available upon request upon request to t to the he Depar Department tment of I

• f Indust

ndustrial rial Relat Relations ions (DIR) (DIR) or

• r the

the Employment Employment Dev Development elopment Depar Department tment (E (EDD DD), and to prov ), and to provide ide each individual each individual ret retained ained as an independent cont as an independent contract ractor

• r wi

with a w th a writ ritten ten notice notice developed by developed by the EDD the EDD t that hat includes s includes specified pecified information. information.  Est Establishes ablishes civil civil penalties penalties for any per for any person son fou found guilty nd guilty of

• f

misclas misclassificati sification.

• n.

 First time offenders shall be assessed a penalty of not less than $5,000 and not more than $15,000 for each violation.  Persons found guilty of a repeated pattern or practice of these violations shall be assessed a civil penalty of not less than $10,000 and not more than $25,000 for each violation.

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LAW & LAW & JURISDICTIO JURISDICTION

NO NO ESCA ESCAPE PE FROM FROM CA CA LAW LAW NARAYA NARAYAN N v.

• v. EGL,

EGL, INC. INC.

La Labo bor r Cod Code e be bene nefi fits ts to to employ employee ees s re requ quiring iring emp employe loyers rs to to pay pay/pro /provide vide: :

ov

• vertime

ertime co comp mpen ensa sation tion; reimbu reimburse emp rse employe loyees for nec es for necess essary ary bu busine siness ss ex expe pense nses, s, an and d pro provide vide off

• ff-du

duty meal period ty meal periods. s.

Pro Prohibit hibit emp employe loyers rs from mak from making ing impro imprope per r de dedu duct ctions ions from wag from wages es

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WHAT ABOUT THE WHAT ABOUT THE IC CONTRACT? IC CONTRACT?

The The Labor Code: Labor Code: These These provision provisions s are are part o part of a broad f a broad regulator regulatory y policy policy defining defining the the

• bligations that “ ‘the law places on

an em an employe ployer r without without regard to regard to the the substance substance of

• f its

its contract contractual ual

• bligations
• bligations to its employee.’

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WHAT WHAT ABOUT ABOUT TEXA TEXAS? S?

The The court r court rejected ejected the Texas c the Texas choice hoice

• f law
• f law clause,

clause, stating: stating: [A]ppellants [A]ppellants claims claims arose arose under the under the Labor Code, a Labor Code, a Califor California nia regulator regulatory y sche scheme, me, and c and conse

• nsequen

quently, tly, California California law law should should apply apply to define t to define the he boundaries boundaries of liabilit

• f liability

y under that under that scheme. scheme.

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ARBITRATION ARBITRATION

-NO NO ESCA ESCAPE PE FROM FROM CA CA LAW LAW Hireem Hireem Elijahjuan Elijahjuan et et al., al., v.

• v. The

The Superior Superior Court Court of Los Angeles

• f Los Angeles County

County Hireem Hireem looks looks to to Naray Narayan an v.

• v. EGL,

EGL, Inc. Inc. (9th Ci (9th Cir.

• r. 2010)

2010) 616 F.3d 616 F.3d 895, 895, 899 899 (Narayan). (Narayan).

11 11/15 15/20 2012 12

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ARBITRATION ARBITRATION

Hiree Hireem looks looks to to Narayan arayan v. EG EGL, L, Inc Inc. (9th th Cir

• Cir. 2010

010) 616 616 F.3d 895 95, 899 99 (Narayan Narayan). Labor Labor Code Code violati violations

• ns di

did not not arise arise out

• ut of
• f the

the contract contract:

“While the the con contr trac acts ts wil will li likely kely be be used used as as evi evide denc nce to to pr prov

• ve or
• r di

disp sprove rove the the st stat atutory utory cl claim aims, s, the the cl claims aims do do not not arise arise

• ut
• ut
• f
• f

the the co contra ntract ct, invo involve ve the the int inter erpr pretat etation ion of

• f any

any co cont ntra ract ct te terms rms, or

• r
• t
• the

herwise rwise re requ quire ire there there to to be be a contract contract.”

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CLASS CLASS ACTION ACTIONS

On On the the rise; rise; Wide Wide spectrum of industries; spectrum of industries; Wage Wage and h and hour

• ur issue

issues

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11 11/15 15/20 2012 12

THE THE FACTO FACTORS RS

Dis Distinct tinct occupat

• ccupation

ion or bus

• r business

iness; ; Kind Kind of

• f occupat
• ccupation;

ion; Usually Usually done under done under the direc the direction of the princ tion of the principal ipal or

• r

by by a s a spec pecialis ialist t wit withou hout t su super pervis vision; ion; Skill Skill requir required in the par ed in the particular oc ticular occupation; cupation; Who Who supplies supplies the ins the instrume trumentalities ntalities, , tools tools, , and the and the place of place of work work for the per for the person doing t son doing the wor he work; k; Len Length gth of

• f time

time for w for which hich the the se serv rvices ices are are to b to be e performed; performed; Meth Method

• d of
• f payment

payment, whethe , whether r by by the time or the time or by by the the job; job; Re Regula gular bu r busin sines ess s of

• f the

the prin principa cipal, l, and and What th What the part e parties believ ies believe. e.

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11 11/15 15/20 2012 12

ADDITIONAL ADDITIONAL FACTO FACTORS: RS:

Opp Oppor

• rtu

tunity nity for pr for profit

• fit or
• r l

los

• ss

s de depe pend nding ing on

• n

his his man manag ager erial ial sk skil ill; l; Inve Invest stmen ment t in equ in equipmen ipment t or

• r mate

materials rials re requ quire ired d for for his his ta task sk, , or

• r his emplo

his employme yment nt of

• f

he helper lpers; s; Ser Service vice re rend nder ered ed re requ quires ires a sp a spec ecial ial sk skil ill; l; De Degr gree ee of pe

• f perm

rman anen ence ce of th

• f the wo

e work rking ing re relation lationsh ship, ip, an and d Ser Service vice re rend nder ered ed is is an an inte integr gral al pa part rt of the

• f the

alleged employer’s business.

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11 11/15 15/20 2012 12

WHICH WHICH FACTO FACTORS RS TO TO USE USE?

“the individual factors cannot be applied mec mecha hanica nicall lly y as as se sepa para rate te te test sts; s; th they ey ar are e inte intert rtwined wined an and th d their eir weigh weight t de depe pend nds s on

• n

particular combinations.” “We must assess and weigh all of the inc incide ident nts s of th

• f the

e re relat lation ionsh ship ip with with th the e understandi understanding ng that that no no one

• ne factor

actor is s de decisive cisive, , an and d th that at i it t is is th the ra e rare re ca case se whe where re th the e va variou rious s fact factor

• rs

s wil will l po point int with un with unan animi imity ty in one direction or the other.”

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11 11/15 15/20 2012 12

WHAT WHAT NOT NOT TO TO DO DO -

DO DO NO NOT: T:

Mak Make e a vide a video

• re

referr ferring ing to to the the dr driver iver - IC IC as as: :

Ess Essen enti tial part of t al part of the he comp compan any; y; Play Playing ing a ke a key role y role in t in the he shipp shipping ing pro proce cess; ss; Th The e eye eyes of t s of the he dispa dispatch tcher; er; A v A vital s ital sou

• urce

rce of ship

• f shippin

ping g lea leads ds for the for the MC; MC; The companies largest “sales force;”

NEVE NEVER R pu put t in writing in writing th that at th the gr e growt

• wth

h of

• f

th the e MC MC depends depends on

• n th

the e dr driver iver - IC. IC.

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11 11/15 15/20 2012 12

DO DO NO NOT T

Use Use a Dr a Driver iver Han Handb dboo

• ok

k th that at look looks s li like ke an an emp employe loyee e man manua ual l or

• r req

require uires s th the e dr driver iver – IC to: IC to:

Use co Use compa mpany ny forms; forms; Cons Constan tantl tly y co commun mmunicate icate wi with th MC MC disp dispatc atch; h; Rep Report

• rt at a

at a ti time me ce certain rtain Sh Show

• w up

up at at a sp a spec ecif ified ti ied time me or face

• r face

disc discipli iplina nary a ry action ction; Gi Give ve a adva dvanc nce e no noti tice ce of

• f va

vaca cati tion

• n ti

time; me; Accept load “batched” as “all or nothing.”

MORE MORE OF OF WHAT WHAT NOT NOT TO TO DO DO -

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11 11/15 15/20 2012 12

MORE MORE OF OF WHAT WHAT NOT NOT TO TO DO DO -

DO DO NO NOT

Req Require uire th the e dr driver iver – IC to: IC to:

Wea Wear r co compa mpany ny logo logo;

Shirts; Shirts; Boo Boots; ts; Hat Hats; s;

Pa Paint int the the t truc ruck a pa k a parti rticu cular c lar color;

• lor;

Di Disp splay lay a co a compa mpany ny ID ca ID card. rd.

Pro Provide vide dr driver ivers s with eq with equipme uipment nt li like ke:

EGL EGL br bran ande ded d bo boxe xes s an and d ta tape pe;

The court went on and on…

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11 11/15 15/20 2012 12

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Conduct an Conduct an inter internal nal – confidential confidential audit of you audit of your worker classification. r worker classification. Review: Review:

Doc Docume ument nts s v.

• v. Rea

Real l Wor World. ld. Inde Indepe pend nden ent t po point int of view

• f view

Consider Consider Occupa Occupational Accident tional Accident Insurance for driver Insurance for driver – IC IC

One One Bea Beaco con Zur Zurich ich Gre Great at Amer American ican

WHAT WHAT TO TO DO? DO?

11 11/15 15/20 2012 12

What What is is the the driver driver – IC l IC look

• oking

ing for? for? $ if $ if injured; injured; Pay Payment ment of medical

• f medical bills;

bills; Lost Lost wages wages due to due to injur injury. y. Ben Benefit efits s better better than than workers workers comp comp? What What are are the sou the sources rces of workers

• f workers comp

compens ensation ation disputes disputes - li liti tigation? gation? Driver Driver – IC’s loss of income; Disap Disappointmen pointment t – Exp Expectation; ectation; Des Desperation peration Looking Looking to t to the he deep deep pocket. pocket.

Occ.

• Occ. Accident Ins.

Accident Ins. driver driver – IC IC

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11 11/15 15/20 2012 12

WHAT WHAT TO TO DO? DO?

Consider Consider the broker the broker – motor carrier motor carrier model: model:

Br Brok

• ker

er au auth thor

• rity

ity un unde der r Title Title 49 49; Eac Each h mot motor

• r ca

carr rrier ier ha has s its its own

• wn au

auth thor

• rity;

ity; Br Brok

• ker

ers s ar are e NOT NOT mot motor

• r ca

carr rriers iers:

Non Non-ass asset; et; Se Sepa parate rate un un-related related entity mu entity must own and st own and leas lease truck e trucks; s; Conc Concess ession ag ion agree reemen ment t ex exec ecute uted d by by moto motor r ca carrier, n rrier, not b

• t brok

roker. er.

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FOR AD FOR ADDITIONAL DITIONAL INFORMATION INFORMATION Conta Contact ct Cam Cameron eron W. Ro

• W. Robert

berts Andre Andrew w D. Kehagiaras

• D. Kehagiaras

Ted Ad Ted Adkinso kinson n www.tr www.tradeandcar adeandcargo.com go.com (310) 642 (310) 642-9800 9800

11 11/15 15/20 2012 12

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11 11/15 15/20 2012 12

DISCLAIMER DISCLAIMER

Robe Roberts rts & Keh Kehagi agiaras aras LLP LLP in in Los Los Angeles ngeles serves serves th the tra trade, de, trans transport portat ation, ion, and and in insuran surance ce com communitie munities. Telephone Telephone: (310 310) 642 642-9800 9800 or

• r on
• n the

the Internet Internet at at www www.tra tradeandcar deandcargo.com com. Thi This articl article provi provides des info informa rmati tion

• n about

about the the law law design designed to to he help rea reader ders address address their heir own

• wn legal

legal nee needs

• ds. But

But le legal gal information information is is not not the the sa same me as as leg legal al advice advice --

• - the

the appl application ication of

• f law

law to to an an indiv individual's idual's spec specific ific circu circumstances mstances. Althoug lthough we we go go to to gre great at leng lengths ths to to make make sure sure our ur info informatio ation is is accura accurate te and and use seful, ful, we we recommend ecommend you you co consult nsult a lawyer lawyer if if you you wa want nt prof profes essional sional assurance surance that that our

• ur

informa informati tion,

• n, and

and your

• ur inter

interpret retation ation of

• f it

it, is is ap appropr propriate iate to to your your part particular icular situation situation.

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