Calif. Shippers Pay Millions, Reclassify Workers in Labor Deal

Shipping company Universal Intermodal and its affiliates have agreed to rehire dozens of fired California port drivers, provide them millions in back pay and cease classifying drivers as independent contractors in a deal that ends two National Labor Relations Board suits, the agency announced in August.

The deal, inked earlier this month, resolves suits accusing the interwoven companies of laying off 66 drivers at the ports of Los Angeles and Long Beach for voting to unionize with the Teamsters and violating federal labor law by misclassifying drivers as independent contractors elsewhere in their enterprise.

The deal was not publicly available Wednesday, but the NLRB summarized its terms in a press release. Among other things, the companies agreed to reopen a Compton, California, facility shuttered after the vote, rehire the drivers and provide "millions" in back pay and agree not to misclassify drivers going forward. The board did not specify the amount of back pay Universal Intermodal agreed to provide.

The union's attorney, Julie Gutman Dickinson of Bush Gottlieb, described Universal as "the role model of a high-road employer" following the deal.

"This sends the message loud and clear that if you want to be a thriving business in California commercial trucking and protect your customers against liability, you must cease your unlawful misclassification scheme," Gutman Dickinson said.

The NLRB's Los Angeles office facilitated the deal between the Teamsters and the companies.

"The resolution of these cases shows that it is never too late for parties to recognize that it is in their mutual interest to resolve their disputes without lengthy and expensive litigation," Los Angeles office head William Cowen said in a statement.

The dispute dates back to late 2019, when drivers servicing the ports of Los Angeles and Long Beach voted to unionize. Weeks later, Universal Intermodal shuttered the Compton facility where they were based and transferred their work to nonunion workers whom the company classified as independent contractors, according to the Teamsters.

The union filed numerous unfair labor practice charges that spawned two high-profile NLRB suits. The first, filed in March 2021, accused Universal Intermodal and its affiliates of interfering with the union drive ahead of the vote, retaliating against the workers for unionizing and ducking their duty to bargain with the Teamsters.

The second suit, filed this past March, accused the companies of misclassifying other workers as independent contractors to stop them from organizing. The suit was based on a novel legal theory that employers violate federal labor law by misclassifying employees as independent contractors, whom the National Labor Relations Act denies the right to organize.

An NLRB administrative law judge sided with prosecutors in the first suit in October, finding the companies shuttered the Compton facility in retaliation for the vote and not because the operation was a money-loser.

The Teamsters and the Universal Intermodal companies inked the deal just before the second suit was set to go to trial Aug. 4, the NLRB said. Other terms of the deal include requirements that the companies recognize the union and abide by an agreed-upon collective bargaining agreement covering the port drivers; give other drivers an opportunity to transfer to the union-represented segment; and post notices at various facilities informing workers of their organizing rights.

Following the announcement, Teamsters President Sean O'Brien said the deal is "a big step, but there's more work to be done."

"The Teamsters will continue to fight until every misclassified worker is an employee under the law," O'Brien said in a statement.

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