Costco dumps trucking firm
Transport business accused of labor abuses
Costco, one of the world’s largest retailers, stopped doing business with a California trucking company accused of trapping drivers in debt, then using it to force them to work overtime.
Brands across the USA face increased scrutiny over labor abuses in their supply lines, a problem revealed in a USA TODAY Network investigation in June.
This month, four Democratic senators, led by Sherrod Brown of Ohio, sent letters to 16 retailers, calling on them to root out “shameful” labor abuses.
Soon after, Costco Wholesale dropped Pacific 9 Transportation, one of the biggest port trucking companies in Southern California.
Hewlett- Packard sent an auditor to investigate the company’s labor practices.
Both retailers declined to comment on their actions. Alan Ta, chief operating officer for Pacific 9, said that even before Costco withdrew, his company stopped leasing trucks to drivers and launched a series of changes to improve their pay.
“We have made significant change in our company and to our industry,” Ta said in an email.
A wave of pressure from retailers and manufacturers has hit port trucking operations across the industry, according to drivers who said their employers have been fielding calls from clients.
Those clients include Walmart, which pledged in a letter to the senators that it would cancel contracts with any trucking company that did not provide “assurances” of fair labor practices.
“The stories profiled in that article are deeply concerning,” Executive Vice President Jay Jorgensen wrote of the USA TODAY Network investigation “Rigged.”
“Any motor carrier that fails to comply with law, such as those alleged in the article, would be in violation of our contract and would therefore be subject to cancellation,” he wrote.
The series revealed how port trucking companies in Southern California spent the past decade forcing drivers to finance their own trucks through companysponsored lease- to- own programs they could not afford.
The longer drivers worked, the more trapped they felt. After a few months, drivers typically had paid thousands of dollars toward a truck.
If drivers quit or were fired for any reason, most of them lost the truck and everything they had paid. Many worked 20 hours a day to keep up with their truck payments and feed their families.
For years, Pacific 9 used the same kind of lease- to- own program.
Forty drivers won California labor commissioner cases against Pacific 9, accusing the company of using the leases to cheat them of fair pay. Half of them testified that they had to work as long as 19 hours a day, violating federal fatigue laws for truckers.
As the USA TODAY Network began investigating and as labor judgments piled up against Pacific 9, the company stopped using leases. In April 2016, facing almost $ 7 million in court- ordered back pay and penalties, the company filed for bankruptcy protection.
It has since started rehiring drivers as full- time employees and stopped charging them truck expenses.
Ta and many of his drivers said the company is working to become amodel for the rest of the industry.
Pacific 9’ s sudden loss of business comes at a precarious time for the company — the tail end of drawn- out bankruptcy negotiation with truckers.
Drivers and their attorneys sent at least two letters to the senators pleading with them to ease pressure on retailers using Pacific 9.
Rivera and Shackelford, a San Diego firm representing some Pacific 9 drivers, said Costco’s decision might “lead to the closing of Pacific 9 altogether,” undoing months of negotiations and possibly leaving drivers emptyhanded.
“We believe this would be a tragedy,” the attorneys wrote.
Some drivers said the same — even those who testified about pervasive labor abuses inside the company.
“Pacific 9 has followed through on its commitments to us drivers,” wrote trucker Santiago Aguilar, who filed a labor claim against the company in 2013 and has since been rehired as an employee with full protections. Aguilar’s letter was signed by 13 others at the company. “Now, I get a fair day’s pay for a hard day’s work,” he said.