The results of a unionization vote at an intermodal STG operation that was owned by XPO Logistics have not been announced as the company seeks to overturn an earlier ruling that declared some of its workers to be employees and not workers. independent contractors.
The ballots were distributed at the end of June to the approximately 260 workers covered by the declaration of employees and the engine of unionization. Some of the workers were seeking both employee status and then unionization under the Teamsters when XPO (NYSE:XPO) sold the California intermodal operation to STG in March.
Shortly after the ballots were sent to the workers, STG, which in legal documents is still listed as “doing business as” XPO Logistics, asked for a review of the decision made in mid-June by William Cowen, regional director of the National Labor Relations Board’s Region 21, which is based in California. In the decision, Cowen said XPO is “in the same business as the drivers, namely delivering customer delivery services using a myriad of resources, including the drivers’ last mile delivery services at issue in this case.” .
And because the drivers had no “ownership interest” in their routes, they are not operating “independent businesses with real and real entrepreneurial opportunity for gain and loss,” Cowen said. This independence test is a key guideline in many cases to determine whether a worker is an employee or an independent contractor.
After declaring the workers employees rather than independent contractors, Cowen then ordered a unionization vote. The ballots for that election were scheduled to be counted on July 15 but were confiscated following the STG’s request to rescind Cowen’s order, according to Julie Gutman Dickson, a lawyer with Bush Gottlieb, which represents labor and the Teamsters.
This request for review was granted on July 13 by a majority vote of three of the full NLRB members. The brief order said STG’s request for review “raises substantial issues.”
(Although XPO Logistics is highlighted in the lawsuit as “STG dba XPO,” an XPO spokesperson told FreightWaves that it sold the business entirely to STG and was not party to any ongoing legal actions.)
“There is no denying that owner-operators are entrepreneurial businesses and individuals over whom STG has little control,” the STG filing states. The initial case brought by the Teamsters and the workers also included second-seat drivers, and STG said the owner-operators, “not STG, have an employment or independent contractor relationship with them.”
Although the introduction of California’s AB5 is not discussed in the case – it is state law and the issues with STG are federal – the reality is that the type of drayage operations conducted by STG is considered the primary target of AB5 funders.
One of the avenues drayage companies can take to comply with AB5 is to turn employees into drivers who have long been considered independent contractors. If the Cowen decision were to prevail, a side effect of such an outcome is that STG’s intermodal operations would likely comply with AB5, the state’s Independent Contractors Act that is expected to be implemented in trucking in weeks following a Supreme Court ruling. decision not to review a decision of the Court of Appeal ordering this execution.
The “entrepreneurial opportunity” for owner-operators cited by the STG in its file has several components. Among them, they have the possibility of hiring second seat drivers; they make “the significant initial investment to acquire a tractor”; owner-operators “do not have to wear a uniform or even physically present themselves at the STG terminals to accept shipments”; and the drivers “negotiate their remuneration”.
But in a filing with the NLRB board as it considers overturning Cowen’s original decision, attorneys for the Drivers and Teamsters cited several job requirements at STG (and at XPO earlier) that, according to them, indicate an employee status, not an independent contractor.
Of those cited (and the dossier uses the name XPO despite the unit now being owned by STG):
- Drivers are subject to random inspections at gates and train terminals. “If XPO detects violations, drivers are required to correct those violations,” the filing said.
- Drivers are required to submit daily logs, even if they are not working. And they are required to receive a load at least over a rolling 35-day period. If they don’t, they are terminated.
- STG’s claim that compensation is negotiated is not true, according to the union’s filing. “The drivers have tried unsuccessfully to negotiate XPO’s fares but XPO is not negotiating.”
- “Dispatchers decide what work they will send to each driver and rarely offer drivers the option to choose which assignment they want,” the filing says.
Gutman Dickinson said the Cowen decision that the workers were employees and not independent contractors was “a very strong decision that leaves no doubt that these drivers are employees who have been misclassified. I have no doubt that the board will maintain that.
An email to attorneys representing STG had not received a response at the time of publication.
Behind the case is an initiative by the NLRB to review the legal advice it uses on independent contractor issues versus employee issues.
The current standard for determining the status of independent contractors used by the NLRB is a case the agency ruled on in 2019, known as Super Shuttle, which involved the status of airport transportation company drivers. Super Shuttle. The Super Shuttle decision is seen as supporting the classification of workers — in Super Shuttle’s case, franchisees — as independent contractors and was made by a Republican-majority board.
Super Shuttle overturned precedent in a 2014 case involving FedEx in which a Democratic majority NLRB issued a decision involving the delivery company. This decision was seen as more favorable to classifying workers as employees rather than independent contractors.
In a blog post in early January, the law firm Foley & Lardner joked that the NLRB’s decision to revisit Super Shuttle was “to the fatigue of many courts, litigants and businesses.”
But the Foley & Lardner blog post was clear in its forecast: “The board is likely to revert to its earlier Obama-era FedEx decision,” it wrote. “A return to the FedEx approach may open the door to more employee misclassification claims, unionization, and greater protection for workers under the [National Labor Relations Act, which established the NLRB].”
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