LOS ANGELES — California Cartage Express (CCE), a subsidiary of NFI Industries, faces mounting legal challenges and public scrutiny over its labor practices at the Port of Los Angeles. The company's classification of truck drivers as independent contractors rather than employees has sparked a contentious debate about workers' rights and corporate responsibility in the nation's busiest port complex.
Port Trucking Industry Under Scrutiny
The Port of Los Angeles, handling approximately 40% of U.S. container imports, relies heavily on thousands of truck drivers who move goods between docks and distribution centers. Industry observers note that the "independent contractor" model has become prevalent among port trucking companies seeking to reduce labor costs.
In 2023, a group of CCE drivers filed a collective action with Los Angeles authorities, alleging systematic labor violations including wage theft and improper classification. The complaint claims drivers were routinely denied at least one hour's pay per day under minimum wage laws.
The Independent Contractor Controversy
CCE's payment structure ties driver compensation to loads transported rather than hours worked. While companies argue this provides flexibility, drivers report significant drawbacks:
- No access to health insurance, paid leave, or workers' compensation
- Responsibility for truck maintenance, insurance, and fuel costs
- Extended work hours exceeding legal limits to earn livable income
- Income volatility tied to fluctuating port activity
"We follow CCE's schedules, use their equipment, and work under their rules - that's employment, not independence," said one driver who requested anonymity due to fear of retaliation.
Company's Troubled Labor History
Regulatory records reveal CCE has faced multiple labor challenges:
- 2018: Los Angeles sued CCE for employee misclassification
- 2020: U.S. Department of Labor ordered $3.5 million in back wages paid
- 2023: Los Angeles City Council denied a warehouse permit to NFI affiliate California Transload Services citing labor concerns
City Councilmember Joe Buscaino stated during the permit hearing: "These companies game the system by misclassifying workers to avoid wage, benefit, and safety obligations."
Legal Framework and AB5 Implications
California's AB5 law (2019) established stricter criteria for classifying workers as independent contractors using the "ABC test." To qualify as contractors, workers must:
- Operate free from company control
- Perform work outside the company's core business
- Maintain an independent trade or business
NFI Industries maintains its position in a statement: "Our independent contractors choose this status intentionally. They value the entrepreneurial opportunity and scheduling flexibility this model provides."
Broader Industry Impact
The Los Angeles Office of Wage Standards' investigation could establish precedent for port trucking compensation structures. Labor advocates argue the case highlights systemic issues in logistics sectors where misclassification allegedly:
- Depresses wages industry-wide
- Shifts business costs to workers
- Creates unsafe working conditions
As the dispute continues, stakeholders await potential rulings that could reshape labor practices at U.S. ports. The outcome may influence ongoing debates about gig economy work models and employee protections in evolving supply chain industries.