Labor Dispute Results in Trucking Company Seeking Bankruptcy Protection
Pacific 9 Transportation is a well-known name in the Los Angeles and Long Beach trucking industry. And while the organization has been known as a successful one in the past, recent labor disputes have caused the group significant financial difficulties. After a labor dispute didn’t go in the company’s favor, Pacific 9 Transportation has filed for bankruptcy protection. The move was done after the company was forced to pay drivers nearly $7 million as per a court ruling.
Drivers have fought for back pay after financial uncertainties plagued the organization. When employees alleged that the company had misclassified them as independent contractors instead of employees, many felt that this error stopped them from accessing proper benefits and protections. The bankruptcy protection will help to halt these collection attempts, and the court ruling for the massive payout will be used to gradually cover the losses incurred by the drivers who were misclassified.
Payment amounts were finalized by a judge last month, and the amounts vary from driver to driver. The records show that one driver is owned nearly $200,000, and another is owed well over $300,000. Though the 75-worker company will continue to operate while the case is ongoing, the company will have to adapt to a debt repayment plan in order to ensure they can continue operations in spite of their new sizeable financial obligations.
Multiple companies have sought bankruptcy protection after wage-claim battles have caused them financial difficulties. Independent contractors traditionally have lower overhead costs and, as a result, are affected by fewer regulations. This may be good for the companies, but it causes the drivers to miss out on a number of benefits provided by laws affecting employees. And while some drivers are perfectly content to work independently, those who feel that companies are purposely listing them incorrectly in order to cut costs feel understandable cheated and have made their voices heard.