Southern California Trucking Company Files for Bankruptcy Protection
The trucking industry is a tricky one, especially when it comes to managing employee relations. With many drivers being hired on as independent contractors in order to save time and money, new liabilities are created.
And as is the case with Premium Transportation Services, Inc., these staffing decisions can lead to costly legal battles. Numerous independent drivers who filed suits claiming that they should be treated as full-time drivers have resulted in the company filing for chapter 11 bankruptcy protection.
More commonly known to locals as Total Transportation Services Inc. (or TTSI), the company sighted downward pricing pressure from many major clients in recent years. This, coupled with the mounting cost of litigation relating to the aforementioned hiring practices, proved to be financially unsustainable for the once-successful trucking company.
With over a dozen lawsuits in state courts and nearly as many mis-classification cases before the California Labor Commission, the company has lost millions in a relatively short time frame. Given the tumultuous nature of the trucking industry, it’s no surprise that such a substantial loss in a short period of time proved catastrophic for TTSI.
The area of Southern California has proven to be a lucrative one for truckers. With an abundance of goods arriving at the port, a constant need for truck drivers has remained even in the face of economic slumps across the nation. Because of this, many accomplished drivers took advantage of the constant demand and purchased (or leased) their own trucks, opting to work as independent drivers for various companies in the area.
However, several drivers argued that they were misclassified as independent truckers by TTSI and, as a result, denied certain benefits and overtime pay. Given that these workers were backed by the International Brotherhood of Teamsters, their claims quickly gained the attention of local authorities who handle labor-related claims.
While TTSI’s sister company Eco Flow Transportation maintains a unique status as one of the areas few all-employee trucking companies, TTSI management’s lack of such a program has led to a large amount of grief for the organization. In an industry where employees sacrifice so much and play such a crucial role in keeping commerce going across the state, claims like this are quick to get attention.
This case serves as an example of the importance of proper labor relations and employee management – the lack of which can substantially harm even the most well-known trucking company.