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Court orders fleet to pay $2 million to drivers in classification case

Pacer Cartage drivers protesting in November, claiming they were misclassified as contractors when they were in fact employees and the carrier denied them wages based on that. A judge recently sided with the drivers. (Photo from the Teamsters Union)

Pacer Cartage drivers protesting in November, claiming they were misclassified as contractors when they were in fact employees and the carrier denied them wages based on that. A judge recently sided with the drivers. (Photo from the Teamsters Union)

Pacer Cartage Inc. plans to appeal a judgment of more than $2 million a California court says it owes to seven drivers for alleged wage theft.

San Diego’s superior court upheld the state labor commission determination that the intermodal transportation and logistics services carrier had misclassified the truckers as independent contractors instead of employees.

It awarded $2,026,483 to the truckers for alleged unlawful payroll deductions. Individual awards to drivers ranged from $387,936 to $85,633, with each allotment including $9,000 in wait time pay. They also are entitled to costs, fees and interest provided under state code, it stated.

XPO Logistics Inc., which acquired Pacer last spring, said it will appeal. “We believe the drivers in question are properly classified as contractors, and that this case is without merit,” said Troy Cooper, XPO’s chief operating officer.

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Judge Jay M. Bloom issued a tentative statement of decision Jan. 28, which means the court can elect to modify the ruling. Both sides have until Feb. 17 to file comments or objections. Additional separate cases have been filed by other Pacer drivers and are pending in other courts, he noted.

Bloom examined the company’s relationship with the truckers to determine if they were misclassified as contractors. The principal test is whether the person paying for the service has the right to control the manner and means of accomplishing the desired result.

The plaintiffs had owned their own trucks until 2009, when stricter emissions standards became effective at area ports. The carrier arranged requirements with the ports for trucks to comply with these new regulations. CTP Leasing, Pacer’s wholly owned subsidiary, leased the compliant trucks to the drivers.

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The drivers were required to get insurance through PCI and remain on call for loads. The trucks were not registered in the drivers’ names and use was restricted to company business.

In 2012, the truckers complained to the California Labor Commissioner that they were misclassified as contractors. Last spring, the commissioner sided with the drivers and awarded them more than $2 million, but the company appealed that decision.

Pacer argued that many rules, such as keeping logbooks, are not the company’s rule but federal law. The truckers pointed out the company set some standards higher than U.S. code, such as requiring drivers be at least 23 years old.

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Bloom examined other aspects of determining employment relationship, including that the plaintiffs provided the same work as the Pacer provides.

He agreed to the drivers’ request to be reimbursed for settlement check deductions and out-of-pocket expenses after concluding the expenses were not reasonable.

Plaintiff attorney Alvin Gomez said many drivers had worked weeks without pay.

“But they continued working with the hope that the company would eventually pay them for the money they were owed,” Gomez said. “Many drivers felt they had no choice except to quit under the ever-present threat that they would be sued if they stopped paying for the company truck and other expenses that the company should have borne itself.”

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