Trucker recalls an ‘industry of abuse’

A USA TODAY investigation finds America’s retail giants have spent a decade ignoring signs of labor abuse in their supply chains, sometimes fighting government efforts to crack down, even as thousands of truckers were driven into debt and poverty. USA TODAY

The U.S. military helped fuel labor abuse at America’s largest ports by relying on trucking companies to move goods even after they violated labor laws and were found to have cheated drivers out of fair pay, a USA TODAY Network investigation found.

XPO Logistics and California Cartage, both found guilty of labor infractions, and another company, Konoike-Pacific, accused of the same kinds of violations by a quarter of its drivers, continue to work as federal contractors or subcontractors.

The companies participate in multi-billion-dollar deals to ship military vehicles and commissary items overseas, raking in taxpayer dollars even after hundreds of drivers leveled formal wage complaints against them.

Drivers at each company said in testimony and interviews they were forced to pay expenses for company equipment. Many drivers said their wages dropped to pennies per hour after companies deducted those costs from their weekly pay. Some said they worked past legal limits and to the point of exhaustion to keep up with the fees. The companies denied the allegations in court.

The Service Contract Act requires federal government contractors and subcontractors to pay their employees minimum wage, with benefits and guaranteed safe workplaces.

After learning of the government’s ties with these port companies, prominent Democrats in the U.S. Senate spoke out against any agencies funding them.

“The DoD shouldn’t be giving taxpayer-funded contracts to companies that cheat their workers out of wages or take shortcuts on safety,” said Sen. Elizabeth Warren of Massachusetts.

Sen. Bernie Sanders called for President Donald Trump to audit the industry and issue an executive order banning port trucking companies with labor violations from receiving federal contracts.

The government shouldn’t reward companies that “exploit and abuse” their truckers, Sanders wrote in a letter Thursday to Trump. “That is unacceptable.”

The Defense Department did not answer questions about what steps it has taken to root out abusive labor practices since USA TODAY Network began reporting on the port industry in June.

“Contracts are only awarded to responsive and responsible offerors,” said Patrick L. Evans, a commander in the Defense Press Operations, which handles media inquiries to the Pentagon.

Evans said the agency refers worker complaints to the U.S. Department of Labor, which enforces labor laws.

Labor Department officials confirmed the agency is investigating California Cartage for potential Service Contract Act violations, after a December 2016 complaint filed by the Teamsters Union. Agency spokesperson Jose Carnevali did not respond to multiple inquiries about other ongoing investigations in the industry.

The USA TODAY Network previously reported that more than 1,100 California port truck drivers have filed labor complaints in civil court and with the state labor commissioner since 2008. That year, a new California environmental law required trucking companies serving state ports to replace old trucks with new, cleaner rigs.

To avoid the cost, many companies pushed their independent drivers into lease-to-own contracts that they didn’t understand and could not afford.

When drivers got sick or fell behind on payments, trucking companies fired them, seizing their trucks and tens of thousands of dollars they had paid toward buying them.

In a 2015 court case, Konoike-Pacific driver Jose Mairena said the company required him to sign a contract without translating it, knowing he couldn’t speak English. He quickly found himself buried in debt from the weekly truck expenses that “left little, if any, take home money for me and my family.”

Konoike-Pacific, a small outfit that specializes in refrigerated cargo, moves containers of frozen food for the Army and Airforce Exchange stores, according to driver manifests spanning from March 2014 to July 2017.

The manifests show the trucking company also has contracts with international steamship giant American President Lines, which has received more than $2 billion in federal contracts from the Defense Department’s transportation division.

Konoike-Pacific and APL did not respond to multiple requests for comment. Drivers’  complaints against Konoike-Pacific went to private arbitration and the outcome is confidential.

Michael Fischetti, Director of the National Contract Management Association, said it’s difficult for federal agencies to police business practices deep in their supply chain. But those agencies can’t ignore labor abuses by subcontractors just because they don’t pay them directly, he said.

“It’s a technicality,” Fischetti said. “It’s not something to hide behind.”

As the USA TODAY Network first reported in June, at least 60 trucking companies operating in California violated labor laws by billing workers for company equipment. But few have received more complaints than XPO Logistics, one of the largest trucking companies in the world, and its subsidiaries.