COURT APPROVES LANDMARK $5 MILLION SETTLEMENT OF CLASS ACTION LAWSUIT ON BEHALF OF PORT TRUCK DRIVERS

LOS ANGELES, CA – Last week, Asian Americans Advancing Justice – Los Angeles (Advancing Justice-LA) and Wage Justice Center secured final approval of a $5 million class action settlement brought on behalf of over 400 Latino and Korean immigrants against a port trucking company comprised of related corporate entities. Port truck drivers are the backbone of a $450 billion industry in Southern California.

“We are proud that with this settlement, hundreds of drivers will be rightfully compensated, and we hope this case sends a strong signal to other drivers that they can win if they fight back. The settlement is the first to successfully attack a dual scheme of misclassification and corporate shell games that is endemic in the port trucking industry,” stated Nicole Ochi, supervising litigation attorney from Asian Americans Advancing Justice – Los Angeles. “Unfortunately, misclassification is the port industry norm. Nearly two-thirds of all port truck drivers nationally are misclassified as independent contractors, resulting in an impoverished, mostly immigrant workforce.”

The company, QTS, Inc., and its related entities, including LACA Express and Win Win Logistics, misclassified their drivers as independent contractors in order to deny them their rightful compensation and then hid behind purported bankruptcy protections to avoid liability for wage theft and other exploitative business practices. By classifying the drivers as independent contractors but controlling them like employees, companies are able to evade taxes as well as shift all the costs of operating their businesses to the drivers, including the cost of trucks, gas, maintenance and repair, and insurance, leaving drivers with poverty wages. These high weekly deductions operate like debt bondage, forcing the drivers to work dangerously long hours to eke out a living.

“The company took money from my paycheck to pay for the truck lease, gas and insurance. Some of my fellow truckers even owed money to the company at the end of a hard week. But over 50 of us drivers stuck together for the last five years, despite being fired and intimidated,” says Samuel Talavera Jr., a former driver for QTS, Inc. “We knew we would help our fellow truckers if we stayed together down this long road.”

Judge Elihu M. Berle of the Los Angeles Superior Court ruled on the motion for final approval of the class settlement. Of the 423 drivers contacted, 243 filed claims representing 82.8% of the total work weeks where violations occurred. Drivers will receive an average of $13,502 each. The settlement also includes up to $7,500 to drivers who the companies retaliated against for asserting their legal rights. Forms of retaliation ranged from refusing to repair drivers’ trucks, being assigned less lucrative routes, and outright firing. For those drivers publicly involved in the litigation, who risked being blacklisted in the industry, an additional $6,500 will be awarded for their efforts.

During four years of litigation, QTS, Inc. filed for chapter 11 bankruptcy, nominally to “reorganize” its debts, but in reality to frustrate the ongoing litigation and evade any responsibility for its debts. “The defendants in this case filed for bankruptcy to try to avoid paying our drivers their hard-earned wages,” said Jay Shin, Directing Attorney at Wage Justice Center. “But we were not ready to concede the millions of dollars stolen from our drivers. We doggedly followed them into bankruptcy court and used innovative legal theories to hold the companies liable.”

In a novel move, the drivers transferred their state court litigation into bankruptcy court by suing the non-bankrupt entities as creditors of the voluntarily abandoned and bankrupt entity. They asked the bankruptcy court to consolidate the assets and debts of all the entangled business enterprises. The parties reached the current settlement after 18 months of litigation in bankruptcy court entailing the subpoena of the defendants’ major customers, review of tens of thousands of pages of documents and deposition of the officers of the business entities.

USA Today Sheds Light on Wage Theft in Port Trucking

USA Today Network investigated industry-wide factors that contribute to wage theft in the port trucking industry.  This report uncovered what we knew to be true from our landmark QTS case:  port trucking companies in Southern California forced drivers to finance their own trucks by taking on debt they could not afford. Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute. Wage theft is not a one-off clerical mistake, but rather a business model that drives full-time workers into poverty.

Read the report here.

KCRW Covers Wage Theft in the Restaurant Industry

KCRW, a National Public Radio affiliate, is airing an investigative series on workplace injustices in Los Angeles’s restaurant industry. This series airs the entire week of August 1, 2016. The series provides thoughtful, in-depth reporting on the scourge of wage theft.

It features coverage of some of Wage Justice’s work (including our victory in the Nem Nuong case) and interview clips with some of Wage Justice’s staff and partner organizations. Check it out online (or on live radio)!

See the details here:

Victory by Truckeros, Wage Justice and Asian Americans Advancing Justice

The Los Angeles Times and a number of other news outlets covered our clients’ recent victory in Talvera, et al v. QTS, et al.
Check out some of the stories below:

Hundreds of Port Truck Drivers Settle Landmark Class-Action Lawsuit for $5 Million

On July 14, 2016, the Wage Justice Center and Asian Americans Advancing Justice-Los Angeles (Advancing Justice-LA) reached a $5 million class action wage and hour settlement on behalf of nearly 400 immigrant Latino and Korean American port truck drivers against a port trucking company comprised of intertwined corporate entities.

“When I chose to stand up and fight for fair wages for myself and my co-workers, I was fired,” says a former driver. “It’s been a long, hard road, but I’m happy that we will see some of our stolen wages, and more importantly, that drivers are no longer held captive by agreements that exploited us in order to benefit the company.”

The company, QTS, Inc., and its related entities including LACA Express and Win Win Logistics misclassified their drivers as independent contractors in order to deny them their rightful compensation, and then hid behind purported bankruptcy protections to avoid liability for wage theft and other exploitative business practices.

The parties reached a settlement after the drivers followed the company into bankruptcy court and asked the court to act in the interest of justice by consolidating the assets of all of the related business entities in order to overcome the company’s disingenuous claims of poverty.

“The settlement is the first to successfully attack this dual scheme of misclassification and corporate shell games that is endemic in the port trucking industry,” stated Nicole Ochi, supervising litigation attorney from Asian Americans Advancing Justice-Los Angeles. “Unfortunately, misclassification is the port industry norm. Nearly two-thirds of all port truck drivers nationally are misclassified as independent contractors, resulting in an impoverished, mostly immigrant workforce. We are proud that with this settlement, hundreds of drivers will be rightfully compensated, and we hope this case sends a strong signal to other drivers that they can win if they fight back.”

By classifying the drivers as independent contractors but controlling them like employees, companies are able to evade taxes as well as shift all the costs of operating their businesses to the drivers, including the cost of trucks, gas, maintenance and repair, and insurance, leaving drivers with poverty wages. These high weekly deductions operate like debt bondage, forcing the drivers to work dangerously long hours just to eke out a living.

“The trucking company dictated how much I got paid, which loads I took, and from whom, yet they denied that I was their employee,” says Victor Vitela, a former driver for QTS, Inc. “I was forced to work 80 or more hours per week, sacrificing my health and my family relationships in order to make just a few hundred dollars after all the expenses they took out of my paycheck.”

“The defendants in this case filed for bankruptcy to try to avoid paying our drivers their hard-earned wages,” said Jay Shin, senior staff attorney at Wage Justice Center. “But we were not ready to concede the millions of dollars stolen from our drivers. We doggedly followed them into bankruptcy court and used innovative legal theories to hold the companies liable.”

Fighting Wage Theft and Economic Inequality in Canada

The Toronto Star discusses the fight against wage theft in Canada’s largest city, which, sadly, faces similar problems to those that Southern Californians have long been struggling to overcome. The article mentions the challenges faced by one of the Wage Justice Center’s clients, Minor.

Check out the article here.

$190,000 in Back Pay Secured for Rosemead Restaurant Workers

The Wage Justice Center, representing California Labor Commissioner Julie A. Su, reached a $190,000 settlement for three workers who were victims of wage theft while employed at a Rosemead restaurant, Nem Nuong Ninh Hoa. The settlement comes after the owners faced a lawsuit for fraudulently transferring the restaurant’s ownership to avoid paying the workers their back pay.

The Labor Commissioner’s Office teamed up with the Wage Justice Center to file a lawsuit in Los Angeles Superior Court in June 2015 against the three owners and their corporations to enforce payment of the August 2013 orders.

The Wage Justice Center specializes in unraveling corporate schemes by employers, and holding them accountable for wage theft.

“This settlement shows that employers who cheat can run but can’t hide,” said Labor Commissioner Julie Su. “Corporate shell games like these are common responses to wage judgments, deprive workers of wages they rightly deserve, and we will take every measure to stop them.”

The three employees, who worked as kitchen staff, regularly worked 12-hour shifts, six days per week with no overtime, meal periods, or rest breaks. They were paid $875 to $900 twice per month, with no pay stubs detailing their hours or lawful deductions. Each worker filed wage claims in May 2012 and January 2013, and won judgments in September 2013 ordering the owners to pay wages owed as well as liquidated damages and penalties.

As a result of the lawsuit settlement, the owners delivered a cashier’s check for $150,000 to the Labor Commissioner’s Office to pay the three workers’ back wages. The other $40,000 owed will be paid in six installments beginning August 1.

See the official press release here.

Come to Our Spring Garden Party with Kevin Kish!

WageJustice2016GardenEvite

Save The Date for WJC’s Annual Garden Party

Save the Date

 

Mark your calendars! The Wage Justice Center cordially invites you to our annual garden party on May 15, 2016. We enjoy the opportunity for our staff, Board Members, funders, community advocates, clients and supporters to mingle and build connections. We are especially honored to have Kevin Kish, Director of the California Department of Fair Employment and Housing, as this year’s featured speaker.

More details and a formal invitation to follow, but for now, SAVE THE DATE!!

Working “Off the Clock”- How Employers Steal Wages

Check out this short film on Wage Theft by Brave New Films!