Any company that depends on unobstructed international supply chains to serve its customers in the U.S. or abroad should appreciate the profound victory that came last week in a federal court’s order permanently barring the Port of Los Angeles from enforcing the so-called employee-driver mandate.
The mandate was one of several provisions in the port’s comprehensive Clean Air Action Plan first approved in 2006, one that would have required drivers who haul containers to and from the ports to be employees of a trucking company as opposed to independent contractors — a group that comprises 80 to 90 percent of drayage drivers today.
The provision, pushed by some organized labor (but not longshoremen) and Los Angeles Mayor Antonio Villaraigosa, a former union official, was designed to open the door for the Teamsters union to realize its long-sought goal of organizing harbor truck drivers. The low earnings potential of drivers and difficult working conditions, which include frequent long wait times outside terminal gates, make harbor truckers an appealing target for Teamsters organizers, although many drivers prefer their independence as owner-operators of their own rigs and choosing when and where they work.
Had the employee-driver mandate withstood legal challenges and the union realized its ambitions, it would have been a game-changer in international trade, and for the Teamsters, which today is a small force in trucking compared to the near-total national dominance it enjoyed decades ago.
Importers and exporters that depend on ocean container transport already know the hazards of co-existing with longshore unions whose contract negotiations are unpredictable at best and can be expected to result in at least some disruption on the docks, adding costs and delaying delivery of goods to customers.
Before a series of court decisions struck down the employee-driver mandate, the industry faced the prospect of a second union with power potentially equal to that of dockworkers to shut down the ports or seriously disrupt the flow of trade.
That made the issue much more than a technical legal battle between the American Trucking Associations and the Port of Los Angeles (the Port of Long Beach settled the issue early on), but a potential structural change that, for the benefit of a few thousand drivers, could have impacted thousands of retailers, manufacturers, farmers and other shippers as well as their millions of customers in the U.S. and around the world.
Through seven years of legal maneuvering, industry argued that whether or not drivers were employees was irrelevant to achieving the necessary goal of improving air quality around the nation’s largest container gateway. And industry was right: Truck pollution at Los Angeles-Long Beach has plummeted 91 percent since 2008 thanks to the mandated introduction of more than 11,000 newer and cleaner trucks. Such an achievement made Los Angeles and Long Beach global leaders among seaports.
“We are glad to see the court reaffirm the decision on the employee mandate. The ports and industry have shown that they can quickly meet the environmental goals of reducing port emissions without such a mandate,” said Jon Gold, vice president, global supply chain and customs policy for the National Retail Federation.
Despite last week’s federal court order to enjoin the Port of Los Angeles from enforcing the employee-driver mandate — a symbolic move, considering the legal issue had been decided in earlier opinions — the Teamsters’ focus on harbor trucking won’t end. The union now is concentrating on organizing drayage companies that already have employee drivers.
The Teamsters in August organized the employee drivers of Toll Global Forwarding, increasing drivers’ wages by $6 to $19 an hour and including medical coverage and pension benefits. Last week, the union supported a 24-hour strike by drivers of Green Fleet Systems in Southern California, who charged management with harassment to prevent them from joining a union. But these are one-off instances that don’t represent anything approaching a trend.
For the Teamsters, going after individual operators while saying drivers are de-facto employees misclassified as independent contractors may result in progress, but it’s likely to be slow and not be an industry game-changer.
As its presence in U.S. trucking has slipped from dominating nearly the entire U.S. trucking industry in the 1960s to essentially three carriers today — ABF Freight, YRC and UPS, the largest Teamsters employer — the union has turned its attention to other industries. It now claims everyone from rail to warehouse workers and funeral directors and drivers as members.
And in trucking, it’s not irrelevant; provisions of contracts with UPS and ABF have been rejected by the rank and file angry at benefit cuts and other provisions, a level of activism that shows the union remains a force at least in LTL and package.
But in harbor drayage, what was arguably the union’s best chance to dominate that sector is now a thing of the past. The beneficiaries of that outcome far outnumber those who would have gained had it gone a different way.