The Trucking Industry Is a “Sweatshop on Wheels.” Here’s How Kavanaugh Could Make It Worse.

Michael Arria October 10, 2018

Brett Kavanaugh is sworn in before testifying during the Senate Judiciary Committee hearing on his nomination be an associate justice of the Supreme Court of the United States, on Capitol Hill September 27, 2018 in Washington, D.C. (Photo By Tom Williams-Pool/Getty Images)

While the nation was focused on Brett Kavanaugh’s con­tentious con­fir­ma­tion process, the Supreme Court began hear­ing argu­ments in New Prime Inc. v. Oliveira, a major labor case that could impact thou­sands of work­ers through­out the coun­try. The Court will deter­mine whether work­ers in the hyper-exploitive truck­ing indus­try can sue their boss­es for break­ing the law. Kavanaugh was­n’t present for oral argu­ments and new Jus­tices often recuse them­selves from such cas­es, but there’s noth­ing but an unwrit­ten rule pre­vent­ing him from cast­ing a vote. If Kavanaugh­’s vote were to prove deci­sive, he could choose to par­tic­i­pate or the jus­tices could decide to re-hear the case.

New Prime (Prime) is a trans­porta­tion out­fit that runs an inter­state truck­ing com­pa­ny. Dominic Oliveira claims that he par­tic­i­pat­ed in Prime’s appren­tice­ship pro­gram and was told by the com­pa­ny that he’d make more mon­ey as an inde­pen­dent con­trac­tor than he would as an actu­al employ­ee. Oliveira signed an Inde­pen­dent Con­trac­tor Oper­at­ing Agree­ment which allowed him the flex­i­bil­i­ty to deter­mine his own sched­ule and work for com­pa­nies besides Prime. How­ev­er, Oliveira claims that Prime had a per­va­sive involve­ment” in his work which pre­vent­ed him from work­ing for oth­er places, despite the fact the com­pa­ny was­n’t sup­posed to. Oliveira filed suit against Prime in dis­trict court, alleg­ing that the com­pa­ny failed to pay him min­i­mum wage, a clear vio­la­tion of the Fair Labor Stan­dards Act.

Prime’s con­tract with Oliveira con­tained an arbi­tra­tion clause that hypo­thet­i­cal­ly required the two par­ties to resolve any work dis­putes through an arbi­tra­tion process, as opposed to a law­suit. Prime filed a motion to com­pel arbi­tra­tion and dodge the legal action, but Oliveira opposed the action, point­ing out that the con­tract is exempt­ed by the Fed­er­al Arbi­tra­tion Act (FAA) which makes arbi­tra­tion agree­ments enforce­able. The FAA exempts con­tracts of employ­ment of sea­men, rail­road employ­ees or any oth­er class of work­ers engaged in for­eign or inter­state com­merce.” In 2001, the Supreme Court deter­mined that his exemp­tion applied to con­tracts of employ­ment of trans­porta­tion workers.”

The Supreme Court will now deter­mine whether Oliveira should have been clas­si­fied as a con­trac­tor, and there­fore will be forced to set­tle for arbi­tra­tion, or whether he will be allowed to take Prime to court. If the Supreme Court rules for the boss­es in this case, it will send a clear mes­sage: that big com­pa­nies that break the law get to decide if and when the rules apply to them,” Ceilidh Gao, a staff attor­ney who filed an ami­cus brief in the case with the Nation­al Employ­ment Law Project, said in a state­ment. If the Supreme Court rules against the work­ers, it would cre­ate fur­ther incen­tives for com­pa­nies to mis­clas­si­fy their employ­ees as inde­pen­dent con­trac­tors. Such a per­verse out­come would be an affront to the basic fair­ness Amer­i­can work­ers demand.”

The case shines a light on an indus­try that has become tremen­dous­ly exploita­tive over the last 40 years. In the 1960s and 70s, truck­ing was a lucra­tive pro­fes­sion with reg­u­lar hours — dri­vers were tak­ing home around $100,000 a year in today’s dol­lars. But things have changed dras­ti­cal­ly since the busi­ness was dereg­u­lat­ed in 1980. In his 2000 book Sweat­shop on Wheels: Win­ners and Losers in Truck­ing Dereg­u­la­tion, ana­lyst Michael H. Belz­er sound­ed an alarm, writ­ing that truck­ers’ medi­an earn­ings had dropped 30 per­cent. Eigh­teen years lat­er, things have got­ten even worse: After fac­tor­ing infla­tion, the wages for truck­ers have fall­en since 2003.

Dereg­u­la­tion also had the pre­dictable effect of weak­en­ing the industry’s unions and increas­ing the num­ber of inde­pen­dent con­trac­tors” like Oliveira who end up owing their com­pa­ny mon­ey as a result of the asso­ci­at­ed expens­es. In the mod­ern unreg­u­lat­ed indus­try, the solu­tion has been to shift the risks of truck own­er­ship to the work­ers them­selves,” explained Steve Vis­cel­li, eco­nom­ic soci­ol­o­gist and author of The Big Rig Truck­ing and the Decline of the Amer­i­can Dream, in a 2016 inter­view. Com­pa­nies insu­late them­selves from the costs of mar­ket [and fuel-price] volatil­i­ty by get­ting the work­ers them­selves to buy the trucks and pay the oper­at­ing expens­es. That’s what they’ve achieved with these inde­pen­dent contractors.”

Oliveria’s case is just one of three arbi­tra­tion cas­es that the Court is sched­uled to hear this term, with Kavanaugh recent­ly added to the bench. Typ­i­cal­ly, Jus­tices don’t cast a vote in cas­es where they weren’t present for oral argu­ments. Most recent­ly Jus­tice Gor­such recused him­self from cas­es that had been heard before he was con­firmed. How­ev­er, there’s noth­ing com­pelling Kavanaugh from par­tic­i­pat­ing and he could weigh in if he want­ed to. 

Kavanaugh’s judi­cial career indi­cates that he’ll con­sis­tent­ly side with busi­ness over work­ers. In 2008, he dis­sent­ed from a rul­ing that estab­lished undoc­u­ment­ed work­ers as employ­ees who can start a union. In 2016, he wrote for the major­i­ty in a case that over­ruled an NLRB deci­sion which allowed Ver­i­zon work­ers to adorn their vehi­cles with pro-union mes­sages. Most infa­mous­ly he sided with Sea­World after one of its train­ers was killed by a whale, crit­i­ciz­ing calls to sanc­tion the com­pa­ny and impose reg­u­la­tions on it.

The case is also being heard amid dozens of gig econ­o­my law­suits filed by work­ers fight­ing to be clas­si­fied as employ­ees. One recent suit showed that Uber saves $500 mil­lion a year by clas­si­fy­ing dri­vers as inde­pen­dent con­trac­tors in Cal­i­for­nia. Ear­ly analy­sis of New Prime Inc. v. Oliveira indi­cates that the Court might be more skep­ti­cal of the employer’s claims than ini­tial­ly expect­ed, but it remains to be seen whether a sur­pris­ing out­come can be won on a Supreme Court that will now pre­sum­ably remain con­ser­v­a­tive for decades to come.

Clar­i­fi­ca­tion: An ear­li­er ver­sion of this piece implied Kavanaugh would def­i­nite­ly be vot­ing in this case. Although that is a pos­si­bil­i­ty, Jus­tices often recuse them­selves from cas­es in which they weren’t present for oral arguments.

Michael Arria is the U.S. cor­re­spon­dent for Mon­doweiss. Fol­low him on Twit­ter: @michaelarria.
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