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Scopelitis in the News: Feary Responds to "Rigged"

by Gregory M. Feary

June 26, 2017

 

On Friday June 16th,  USA Today ran a front page article called “Rigged” which was subsequently reprinted in many of Gannett’s local newspapers. The piece holds itself out as investigative journalism, but, on many levels, fails to correctly tell a balanced story. “Rigged” fails to acknowledge that it is not representative of the port trucking industry in California nor the small entrepreneur business segment in trucking across America.

Thus, Scopelitis President & Managing Partner Greg Feary composed a piece that counters and expands upon many of the points in “Rigged”. A version of his response ran in a Transport Topics opinion piece called, "USA Today Report Misses Mark," but the full version is included below for clients and friends of the Firm.


“RIGGED” - USA TODAY’s “Investigative Report”

Greg Feary

First, a disclosure or disclaimer: The opinions expressed herein are based on my experiences as a practicing attorney for nearly 30 years, defending virtually all of the top transportation companies in America. And my firm is widely regarded as the preeminent transportation law firm in America. I cannot ignore the impact of my experience and concede it may result in a bias in this response to USA Today’s June 16, 2017, front-page article, “Rigged,” which the Indianapolis Star and other papers—affiliated by ownership with USA Today—reprinted on Sunday June 18th. Readers of this response must consider the possibility of my bias.

USA Today provided no similar disclaimer to accompany its “Rigged” story. While holding itself out as “a year-long investigation by the USA Today Network,” the story makes no attempt to present a balanced report of the California port trucking industry, much less an even-handed exposé that could have included references to the vital and successful small-business segment in trucking where one-truck entrepreneurs have thrived and grown. Instead, the “Rigged” story spins a compelling tale of “modern-day indentured [servitude]” based on a rigged sampling of disgruntled drivers’ “sworn statements” and possibly accurate accounts of misguided trucking managers. I need not ask if USA Today carefully vetted politically tilted judicial and regulatory outcomes or if it considered plaintiffs’ attorneys and organized labor’s influence, as it is apparent the “Rigged” story succumbs to the sad reality that interesting stories are often born from circumstances that form on the fringe rather than predominate a situation, a family or even an industry segment. I have no intention of sniping at the authors’ word choices or biased implications. I do hope to correct misstatements and offer information the article disregarded or did not find. I do so in hopes of providing more balance for consideration by the unbiased reader.

Fortunately, port truckers can be independent contractors in California and can be independent contractors under every state’s law and under federal law. In fact, more than half the states in America have statutes specifically saying just that! The “Rigged” story proclaimed that as a result of “97% of cases heard” favoring employment status (an assertion devoid of adequate context), “port truckers in California can’t legally be classified as independent contractors.” Even if this “97%” statistic was valid, the statistic ignores the fact that some truckers were found to be independent contractors; it ignores the fact the majority of truckers acknowledge their independent business status without challenging it; and it ignores the fact that California has no law suggesting truckers cannot be independent contractors. The USA Today Network also failed to investigate the circumstances under which these cases were heard. For example, the article made no mention of the fact that the California Department of Labor Standards Enforcement, has been using a boiler-plate prewritten decision—complete with the original typos—in case after case to proclaim truckers are employees. This seeming departure from due process in California would have merited a few words within the “Rigged” story. The “Rigged” story uses the clean truck program initiated in 2008 as a way to advance the proposition that port trucking companies forced truck drivers to pay for the $2.5 billion of clean trucks that the Ports of Long Beach and LA levied on trucking companies who caused the “environmental mess.” What the “Rigged” story does not say—but was, by the fall of 2011, widely reported in publications from the Wall Street Journal and LA Times to industry-specific journals such as Transport Topics and the Journal of Commerce—was that the 9th Circuit Court of Appeals (i.e., a court hardly known for supporting independent business entrepreneurship in trucking) struck down a mandate within the Port of LA’s rule that only employee truck drivers could access the Port of LA (a similar provision had by then been abandoned by the Port of Long Beach). The 9th Circuit did not say the independent contractor classification of port truckers is illegal, rather it said it was unlawful for the Port of LA to interfere in contracts between motor carriers and third parties. This ruling helped preserve an important segment of port trucking where small businesses—i.e., independent contractors—that own and operate their trucks can thrive.

The “Rigged” story also did not acknowledge the influence and interests of organized labor on the clean truck program, a program that the unions hoped would generate more dues-paying union members—again, widely reported at the time. Instead, the USA Today Network adopted organized labor’s “altruistic” narrative that “the union has for years helped drivers file labor complaints and lawsuits.” Whether this single statement, or even the timing of the “Rigged” story’s publication (which coincides with Teamsters’ announced picketing plans of several major port trucking companies) reveals a bias remains speculation but at least must be considered when forming an opinion. Consider some general facts that the “Rigged” story did not include. America has at any given time over the past 20 years about 3.5 million truck drivers. There is a shortage of truck drivers approximating well in excess of 100,000 truck drivers. Trucking companies as a whole have job openings for employee truck drivers at a rate far in excess of the demand for independent contractors. In other words, it is much easier to get a job and succeed as an employee driver than it is to become a successful independent contractor. It is a fact that tends to be true in business in America—starting and then succeeding as a small business is difficult. While statistics vary, it is commonly held that roughly 500,000 independent contractor truck drivers operate in America. Based on a 2015 California Trucking Association Inland Empire Economic Partnership study—a study drawing from a cross-section of independent truck drivers, rather than from a group of truck drivers, like those the “Rigged” story referenced, who are, by definition, already disgruntled and self selected or influenced to be claimants—independent contractors operating heavy tractor-trailers report average annual earnings between $30,000 and as much as nearly $106,000, after paying business expenses such as fuel, insurance, repairs and other items. The median net reported earning based on this same study was in excess of $55,000 (again, after paying truck operating costs). For the same geographical region in California, median annual pay for employee drivers was just above $40,000 based on a 2,000-hour work year. Admittedly, independent business entrepreneurship is not for everyone, but the above-statistics reveal the fallacy of the “Rigged” story: How could the port trucking companies press the port truckers into what the “Rigged” story suggests is tantamount to slavery when the truckers have so many options available at the outset and each is free to choose his/her own career path? Most independent contractor truck drivers have the option to work as employees but intentionally choose a different path—one of entrepreneurship. The vast majority are rewarded for that choice, but that choice requires hard work, smart decisions and dedication over time. There are those who fail and move onto other occupations, as well as those who fail and blame others for failing. I also acknowledge there are those within a business who prey on would-be victims to succeed in their own career paths.

The “Rigged” story does not so much fail in telling a story that is accurate as far as it goes and based on its selected perspective. Certainly, claims are made by workers in many industries. Many claims are valid and many reveal wrongdoing and abuse. The trucking industry is no different. But the “Rigged” story, from my possibly biased view, looks far more like an attempt to use the experiences of a small sector of the port trucking industry to paint a picture of the entire port trucking industry. And in so doing, departs from investigative journalism and enters into editorial commentary—but without the disclaimer.

 

Greg Feary is President & Managing Partner of Scopelitis, Garvin, Light, Hanson & Feary, America’s preeminent full-service transportation law firm. He practices in a wide range of areas including transportation laws, independent contractor laws, transportation insurance laws, legislative support and transportation contract matters. Feary is the author of The Definitive Industry Primer on Occupational Accident Insurance in Trucking and Independent Contractor Employment Classification:  A Survey of State and Federal Laws in the Motor Carrier Industry. He also serves as an adjunct professor of transportation law at Indiana University, McKinney School of Law.