America's Severe Trucker Shortage Could Undermine the Prosperous Economy
LAKE MILTON, Ohio — Bob Blocksom, an 87-year-old former insurance
salesman, needs a job. He hasn’t saved enough money for his
retirement. And trucking companies, desperate for workers, are willing to
give him one.
Age didn’t matter, they said. If Blocksom could get his “CDL” —
commercial driver’s license — they would hire him for a $50,000 job.
One even offered to pay his tuition for driver training school, but there
was a catch: Blocksom had to commit to driving an 18-wheel truck all
over the United States for a year.
So far, that has been too big of an ask for Blocksom, who doesn’t want to
spend long stretches of time away from his wife of 60 years. “The more I
think about it, it would be tough to be on the road Monday through
Friday,” he said.
As the nation faces a historically low level of unemployment, trucking
companies are doing what economists have said firms need to do to
attract and retain workers: They’re hiking pay significantly, offering
bonuses and even recruiting people they previously wouldn’t have
But it’s not working. The industry reports a growing labor shortage —
63,000 open positions this year, a number expected to more than
double in coming years — that could have wide-ranging impacts on the
Nearly every item sold in the United States touches a truck at some
point, which explains why the challenges facing the industry, including
trucking companies rapidly raising prices as they raise wages, have
special power to affect the entire economy. Already, delivery delays are
common, and businesses such as Amazon, General Mills and Tyson
Foods are raising prices as they pass higher transportation costs along
to consumers. On a recent call with investors, a Walmart executive called
rising transportation costs the company’s primary “head wind.”
Technology leaders such as Elon Musk hold out driverless trucks as a
solution, but industry insiders say that is many years away. For now the
industry simply can’t find a way to move goods as fast and cheaply as
they have in the past. This logjam will be especially perilous, economists
say, if competition for truckers pushes up prices so quickly that the
country faces uncontrolled inflation, which can easily lead to a recession.
“This is slowing down the economy already,” said Peter Boockvar, chief
investment officer at Bleakley Advisory Group. “If it takes me a week
instead of two days to ship products from point A to B, I’m losing
At TDDS Technical Institute, an independent trucker school in Ohio
where Blocksom has considered enrolling, veteran teachers say they
have never seen it this bad. They say there may be closer to 100,000
truck driver openings.
“As long as you can get in and out of a truck and pass a physical, a
trucking company will take a look at you now,” said Tish Sammons, the
job placement coordinator at TDDS, whose desk is full of toy trucks and
fliers from the companies that call her daily begging for drivers. “I
recently placed someone who served time for manslaughter.”
There’s only one option right now for most trucking companies: Give
substantial raises. Recruiters who show up daily at TDDS are offering
jobs that pay $60,000 to $70,000, with full benefits and a $4,000
In interviews with more than 60 trainees, recruiters and people who
explored trucking but decided not to take the job, most said they feel
that higher pay will help but that the industry’s problems are much
deeper than that.
A harsh life
Trucking remains one of the most dangerous professions in the country.
There were more than 1,000 fatalities among motor vehicle operators in
2016, according to the Labor Department, meaning being a commercial
driver is nearly eight times as deadly as being a law enforcement officer.
“It takes a special breed to be a trucker. It’s a tough job,” said Rick
Rathburn Jr., the owner of TDDS, a school his late father started in the
early 1970s. A trucking company recently tried to buy the entire school. The community around TDDS is full of shuttered factories and bars
named “Lucky Inn” and “Horseshoe.” The steel mills closed in the 1980s,
and a GM factory just announced more than a thousand layoffs. One of
the only industries growing in the area is trucking, yet locals are hesitant
to become truckers.
One man, a janitor, hanging out at Larry’s Automotive repair shop in
nearby Warren, said his uncles were truckers and told him they would
“kill him” if he ever got into the harsh business. The owner of the shop
said he had thought about becoming a trucker but decided it wasn’t
feasible after he had children.
Trucking jobs require people to leave their families for weeks at a time
and live in a small “cabin” with a hard bed. Divorces are common,
veteran drivers say, and their children forget them. A life on the road is
often costly and unhealthy. Drivers sit for hours a day in diesel trucks
and pull into truck stops that typically serve greasy hot dogs and chili.
Weight gain and heart disease are common, says Gordon Zellers, an
Ohio physician who spends half his time examining truckers and
administering drug tests, which increasing numbers of CDL applicants
fail. He advises the TDDS students to see a nutritionist, but he knows
Alex Thomas and Rob Neal are two of the youngest students at TDDS —
Thomas is 26 and Neal is 28. As they sat in a truck in the TDDS parking
lot practicing, they joked with each other about which one would be the
first to develop a “trucker’s belly.”
Thomas and Neal had construction jobs before they enrolled in the 16-
week course at TDDS.
Trucking often competes with construction and manufacturing for
workers. Both of those industries have been on a hiring spree lately, as
well — and unlike trucking, construction and factory jobs typically don’t
require additional schooling. To get a commercial driver’s license, an
applicant needs to attend several weeks of school, which can cost about
$7,000 before financial aid.
The two young men who switched into trucking say they’re doing it for the
money and, they hope, more freedom. But many of their friends were
surprised by the move.
“I used to work in a sand-and-gravel pit. Workers in the pit called the
truckers scum,” said Thomas.
Poaching and quitting
As it has trouble recruiting new workers, the industry also is struggling to
hold on to drivers. Turnover in the trucking industry has skyrocketed to
94 percent, according to the American Trucking Associations, meaning
most drivers at the major trucking companies don’t spend more than a
year in their jobs.
That reflects a combination of poaching and quitting. (A new government
requirement went into effect in December that requires all drivers to
electronically log their hours, meaning they can no longer cheat
regulations by driving more than 11 hours a day.)
People with CDLs suddenly seem as coveted as computer programmers.
Trucking company recruiters descend daily on the United States’ truck
driver training schools — roughly 500, according to the Commercial
Vehicle Training Association — to fight for new graduates.
“These guys are like diamonds right now,” said Jason Olesh, a vice
president at Aim Transportation Solutions who left his family vacation to
rush to TDDS to talk to students. “We’re down 90 drivers across our fleet
Olesh gave his best pitch to the students: He offered them jobs that pay
$70,000 a year with full benefits and regional routes hauling water to oildrilling
sites that would have them home most nights.
“I’m offering you a regular job with a 10- to 12-hour shift so you can see
your kids,” Olesh said.
He never used to recruit drivers right out of school because his jobs are
the coveted ones in the industry that don’t require drivers to go “over the
road,” trucker-speak for being away from home for at least a month. But
he started coming to TDDS this year because the company needs drivers
so badly that it is lowering the bar for new hires.
At the end of his session, a few students gave Olesh their contact
information — but not enough to make even a dent in the job openings
Lately the industry has tried to broaden its appeal, but women still make
up just 6 percent of drivers, and African Americans 10 percent. Still, trucking can be a pathway to a middle-class life. TDDS alumni often stop
by, including many Somali refugees who’ve been trained there.
But while members of the TDDS faculty love trucking and serve as
cheerleaders for the industry, most of their own children have gone to
college and now work desk jobs.
“Trucking is seen as a last resort if people can’t find another job,” said
Otto Smith, an admissions representative at TDDS. “We’re a hidden
diamond for people looking for work.”
I didn’t know Kate Spade or Anthony Bourdain but saw familiar threads in their suicides, as my mother took her own life at age 51.
Spade had spoken to her father the night before and was looking forward to a trip to California. Bourdain was in one of his favorite countries, France, working on his television show. My mother, struggling through her third and failing marriage, had arrived at a plan to get back on her feet, supported by friends and family.
People were shocked when Spade and Bourdain hanged themselves, she in her New York apartment, he in a hotel room in Strasbourg. No one saw it coming when—a day after expressing optimism about her future—my mother drove into the desert, connected a hose to her pickup’s exhaust pipe, strung it through the cab’s back window and died of carbon-monoxide poisoning.
Spade left a note, reportedly telling her 13-year-old daughter it wasn’t her fault. My mother wrote a letter, expressing pride in her five children, telling her grandchildren she loved them, and absolving her family for her decision.
These final messages won’t assuage the irrepressible sense of guilt and shame that family and friends feel after a suicide: I should have known. If only I had paid attention. I should have done something.
Except you aren’t responsible. Suicide is the most personal, solitary decision a human being can make. Whether the culmination of a long decline or a shock like a thunderbolt on a clear day, suicide is often driven by depression, anxiety, drug addiction or other mental disorders. Yet it is among the most preventable causes of death in the U.S. today.
Shortly after I wrote about my mother’s death in a memoir, I received a gracious email from David Axelrod. We had never met, but it turned out we had more in common than working in the White House, he for Barack Obama and I for George W. Bush. David’s father died by suicide when David was 19, and police came to his college dorm room to ask him to identify the body.
David later wrote a beautiful tribute to his father, offering the insight that his dad “was impacted by the sense, so prevalent in our society, that depression is somehow a character flaw rather than an illness.” He believes that’s what kept his father, a psychologist, from seeking help, along with many others.
Spade talked about a continuing sadness, family members said. My mother wrote in her suicide note that she was “very tired, deep inside tired.” A study by the Centers for Disease Control and Prevention found that many people resorted to suicide after problems in a relationship, or amid stress over work, physical health or finances. Substance abuse is also a major trigger. Such challenges may bring on depression or make an underlying depression worse.
The stigma surrounding mental illness keeps many with depression from seeking treatment. Who would refuse treatment for any other life-threatening disease if a physician could say: “We’ve caught it in time, we can deal with it and you don’t need to die from it”?
On the practical front, anyone who feels suicidal should ask for help before taking an action from which there is no return. The number for the National Suicide Prevention Lifeline is 1-800-273-TALK (8255). Veterans can then dial 1. People are available 24 hours a day. The website SpeakingOfSuicide.com offers important resources. If you or someone you know feels suicidal, talk to a doctor or mental-health professional. Call family, clergy or friends. Dial 911 if necessary.
The smart woman from Kansas City with a wonderful smile created joy for many with her stylish, sophisticated handbags. The tall cook with curly gray hair and a jutting jawline introduced millions to the world’s food and drink. We know their stories, but must not forget that 863 other Americans—most of them less famous, but no less valuable as human beings—died by suicide last week too, according to the American Foundation for Suicide Prevention.
To those who contemplate suicide, realize the world won’t be better for your absence. There will be a child, spouse or parent, a colleague or co-worker, neighbor or friend who will miss you more than you know. Despair can be overwhelming, but it is not permanent. We all need others to walk beside us in difficult moments. And remember, you are precious in the eyes of God and those who love you.
The largest union representing federal workers took the Trump administration to court Thursday to block a new executive order that severely restricts the time employees may spend on union activity, claiming the president’s action violates the First Amendment and oversteps his constitutional authority.
The lawsuit filed in U.S. District Court for the District by the American Federation of Government Employees ratchets up labor-management tensions that have simmered at federal agencies since President Trump took office.
“This president seems to think he is above the law, and we are not going to stand by while he tries to shred workers’ rights,” J. David Cox Sr., national president of the AFGE, said in a statement announcing the lawsuit.
“This is a democracy, not a dictatorship,” Cox said. “No president should be able to undo a law he doesn’t like through administrative fiat.”
The White House referred questions about the case to the Justice Department, which declined to comment.
The restriction on what is known as “official time” — which will ultimately have to be bargained through collective bargaining contracts at federal agencies — was one of three orders the president signed late Friday before the Memorial Day weekend to roll back long-held civil service protections for federal employees.
Under official time, federal employees who also serve as union officials are permitted to work on-duty time to represent employees who have filed grievances claiming unfair labor practices by management or who are appealing disciplinary action against them.
These officials, who spend anywhere between half and all of their time working on union matters, also negotiate collective bargaining agreements. Their responsibilities are limited to representing employees in the workplace and do not include internal union business, such as collecting dues, soliciting membership or elections.
The other executive orders Trump signed instruct agencies to crack down on unions in contract negotiations — with the goal of less union-friendly agreements — and to move more aggressively to fire employees with records of misconduct or poor performance.
Administration officials say these changes, which build on successful efforts in several states to weaken public employee unions, will make government smaller and more efficient by weeding out bad apples and rewarding employees who play by the rules.
But the most controversial change has turned out to be to the official time guarantee that Congress gave federal employee unions four decades ago. That guarantee allowed union representatives to use some of their work timeto negotiate for workers on everything except pay, which is determined by Congress through the General Schedule.
Conservatives in Congress have tried unsuccessfully for years to restrict official time. The administration, which says the work of public employee unions should not be heavily subsidized by taxpayers, estimates that reducing the practice to 25 percent will save taxpayers as much as $100 million a year.
AFGE, which represents about 700,000 federal workers, argues in its lawsuit that the Trump administration has violated the union’s right to freedom of association, guaranteed by the First Amendment. The lawsuit claims the administration has singled out labor organizations for disparate treatment.
The union is using language from the executive order to make its point: The order prohibits union employees from using official time to represent other federal workers in grievance or disciplinary proceedings, but it provides an exception for employees working on their own cases.
“There is no valid basis to distinguish grievances brought by the union [on behalf of the] union or grievances in which a union representative seeks to represent another employee from grievances brought on an employee’s own behalf or instances in which an employee is to appear as a witness in a grievance proceeding,” the lawsuit says.
By singling out unions for what it calls “disparate treatment,” the lawsuit says the executive order “unlawfully restrains and retaliates against AFGE and its union-member representatives, separately and collectively, in and for the exercise of their rights to expressive association.”
AFGE also says that mandating the number of hours agencies may authorize for employees’ use of official time to 25 percent illegally changes a provision of the law Congress passed in 1978 — the Civil Service Reform Act — that governs collective bargaining and determines that official time is lawful.
“Congress passed these laws to guarantee workers a collective voice in resolving workplace issues and improving the services they deliver to the public every day — whether it’s caring for veterans, ensuring our air and water are safe, preventing illegal weapons and drugs from crossing our borders, or helping communities recover from hurricanes and other disasters,” Cox said.
“We will not stand by and let this administration willfully violate the Constitution to score political points.”
Leaders of the National Treasury Employees Union, the second-largest federal labor organization, with about 150,000 members, said they are still studying what the executive orders mean for existing collective bargaining contracts , weighing legal action and communicating with their members.
“Our basic message [to our members] is that the administration has made it very clear they think federal workers are dispensable, that they don’t respect and value front-line employees,” said Tony Reardon, the NTEU’s national president.
Los Angeles City Council Unanimously Vetoes Preferential Operating Agreement Granted to Law-Breaking Trucking and Warehouse Company Approved by Port of LA Harbor Commission
Los Angeles, CA – Today, the Los Angeles City Council, which oversees the largest container port in North America, unanimously vetoed the Foreign Trade Zone Operating Agreement (FTZ) granted by the Port’s Harbor Commission to California Cartage’s warehousing and port trucking operations located on Port property in Wilmington, CA. The FTZ designation provides a clear competitive advantage to NFI/Cal Cartage, the largest trucking and warehousing operation at the port, by providing tax breaks to its retail clients. The Los Angeles Harbor Commission approved the FTZ for Cal Cartage, which was purchased by NFI Industries in October 2017, despite the ongoing pattern of violations of health and safety, employment, and labor laws at the company (see list of legal and regulatory action below).
For the past three years, NFI/Cal Cartage warehouse workers and port drivers have persistently demanded that the LA Harbor Commissioners address the enduring law-breaking at the company’s warehousing and trucking facilities, which are located at 2401 East Pacific Coast Highway, which is owned by the Port of Los Angeles. This site includes the NFI/Cal Cartage warehouse and two related trucking companies, K&R Transportation and California Cartage Express.
“We entrust our City authorities with ensuring compliance with all City contracts, especially when these agreements give corporations like NFI/Cal Cartage a competitive advantage,” said Eric Tate, Secretary-Treasurer, Teamsters Local 848, in a letter to Councilmembers in advance of the vote. “Given the sheer volume of government findings, ongoing investigations, and unmistakable evidence that Cal Cartage is a recidivist law breaker, it is overwhelmingly clear to us that the Harbor Commission failed to ensure that Cal Cartage meets the necessary requirements in the Operating Agreement.”
“Time and again I have told the LA Harbor Commission that NFI/Cal Cartage is breaking the law by misclassifying me as an independent contractor yet they continue to give sweetheart deals to the company,” said Gustavo Villa, a misclassified port truck driver employed by Cal Cartage Express. “I am so grateful that Councilmember Buscaino stepped in to block this sweetheart deal for a company that has shown no regard for the laws of the land.”
“For the past four years, I have worked at the Cal Cartage warehouse and have been outspoken about the unsafe conditions there. There are forklifts that don't brake and the high heat is a problem. A co-worker got sick because of the over 100 degree heat inside the container and management said to just cover him with boxes,” said Bruce Jefferson, a Cal Cartage temp warehouse worker. “Every job at the ports should be a good and safe job, and I’m glad that the City Council agrees that no special tax breaks should be given to companies that are breaking the law.”
“We should never give incentives, like the Foreign Trade Zone Permit, to law-breaking companies where abuse and pressure to work quickly are common, where faulty brakes on forklifts are left unrepaired, and where truck drivers continue to drive for 18-20 hours per day for pennies,” said Alice Berliner, Southern California Coalition for Occupational Safety & Health (SoCalCOSH). “When the Harbor Commission renewed the NFI/Cal Cartage Foreign Trade Zone Permit, they sent the message that it’s okay to pay workers poverty wages, it’s okay to steal drivers’ wages, it’s okay to allow occupational injuries, and in some cases fatalities, on City property. And most importantly, when the Harbor Commission renewed NFI/Cal Cartage’s FTZ Agreement, it sent the message that the City of Los Angeles condones this abuse. Today’s Council veto of the Agreement reverses this unjust decision and sends a strong message that worker health and safety matters.”
On April 5, 2018, the LA Harbor Commission approved a one-year Foreign Trade Zone (FTZ) Operating Agreement with the company. On April 17, 2018, the LA City Council approved a motion filed by Los Angeles City Councilmember Joe Buscaino to assert jurisdiction over the matter, and on May 1, 2018, the Trade, Travel, and Tourism Committee recommended that Council veto the Harbor Commission’s approval of the FTZ agreement. Today, the full City Council voted to veto NFI/Cal Cartage’s FTZ Operating Agreement.
Background: Regulatory Action and Litigation at NFI/California Cartage
California Cartage, based in Wilmington, CA, is one of the largest goods movement companies in America, with warehouses and port trucking operations across the U.S. Referred to herein as “NFI/Cal Cartage,” this family of companies was recently acquired by the New Jersey-based National Freight Industries (NFI). Previous to this acquisition, Cal Cartage was owned and managed by Robert Curry, Sr. and his family. NFI/Cal Cartage represents the largest trucking operation at the Ports of Los Angeles and Long Beach by a wide margin.
Port Trucking Operations
The NFI/Cal Cartage family of companies includes five major trucking operations at the Ports of LA and Long Beach. The four largest - K&R Transportation, California Cartage Express, ContainerFreight EIT and California Multimodal LLC (CMI) – have been facing multiple claims in the courts and government agencies for misclassifying their drivers. In several instances, agencies have already determined that drivers were, in fact, employees. K&R and California Cartage Express operate out of the same property as the Cal Cartage warehouse (described in the following section), CMI operates out of a nearby Wilmington yard, and ContainerFreight operates out of a yard in Long Beach. Combined, more than 600 alleged misclassified drivers work for these companies.
Agency Investigations and Determinations
California Labor Commissioner
Over the past two years, there have been at least 12 decisions issued by the California Labor Commissioner in individual claims filed by NFI/Cal Cartage drivers working for K&R Transportation, Cal Cartage Express, ContainerFreight, and CMI. All of these claims found that the drivers were, in fact, employees, and not independent contractors. Together, those decisions ordered NFI/Cal Cartage to pay those 12 drivers a total of $1,419,102.62for Labor Code violations including unlawful deductions and unreimbursed expenses. NFI/Cal Cartage has appealed twelve of these cases, settling eight of them, while one remains pending in Superior Court.
There have been an additional 28 Labor Commissioner claims that drivers have filed against NFI/Cal Cartage, all of which appear to be pending (of these, 15 were filed by K&R drivers and 12 by CMI drivers). 10 of the K&R drivers had their hearings in December 2017, and a decision is pending. There are hearings scheduled beginning May 7, 2018 in the claims of 10 CMI drivers. The total liability for those 28 claims is over $5 million.
California Employment Development Department (EDD)
At least four K&R drivers have been determined to have been employees – not independent contractors – by the California EDD in individual benefits determinations.
In June and September of 2017, the California EDD filed at least two tax liens against K&R Transportation.
Los Angeles City Attorney
On January 8, 2018, Los Angeles City Attorney Mike Feuer announced that his office had filed lawsuits against Cal Cartage Express, CMI, and K&R Transportation for violation of Unfair Competition Law by misclassifying port truck drivers as independent contractors and evade paying taxes and providing benefits to drivers.
In recent years, NFI/Cal Cartage has faced four class action lawsuits in California Superior Court for multiple Labor Code violations, including willful misclassification, unlawful deductions, unreimbursed expenses, unpaid minimum wages, and failure to provide meal and rest breaks, along with violation of California’s Unfair Competition Law. In December 2017, the last pending case settled for $3.5 million and a motion for final approval is scheduled for May 2018. The company recently settled three similar suits.
NFI/Cal Cartage also recently settled two “mass action” lawsuits for misclassification and wage theft in CA Superior Court involving 55 drivers.
Cal Cartage Container Freight Station in Wilmington, CA, is a warehouse and freight center on Port of LA property and employs approximately 500 workers, with 80 percent of the workforce being employed through a temp agency. While Cal Cartage warehouse workers once had good paying jobs that provided benefits, they have not had representation from a union in over 30 years and conditions have suffered. Workers are now paid the state minimum wage with little or no benefits (even though they are entitled to a higher wage under the Los Angeles Living Wage Ordinance), and work in health and safety conditions that are deplorable. The company has been cited for serious health and safety violations twice in the past three years, and workers face serious retaliation resulting in unfair labor practices charges and five strikes.
Health & Safety
The warehouse facility has health and safety issues. The building was built in the 1940s and is poorly maintained. Several workers have been hurt just trying to walk around the facility due to potholes and poor infrastructure. The machines, including forklifts, are not maintained and often have faulty brakes and horns—leading to accidents. Workers filed a formal complaint with Cal/OSHA in June 2015, triggering an investigation at the facility. In November 2015, over $21,000 in citations were issued—4 serious and 6 general penalties. It was noted in these citations that the chipped paint at this facility contains lead.
Cal/OSHA reinvestigated the facility a year later, resulting in additional serious citations in November 2016 amounting $67,150 for the warehouse and $51,275 for the staffing agency. Citations included not providing workers with steel-toed boots, not properly attaching shipping containers to the dock, and repeat violations for unsafe brakes on forklifts. The investigation regarding the company’s abatement of these citations is still active. Workers filed a third Cal/OSHA complaint in November 2017, and the investigation is still pending.
National Labor Relations Board
On February 28, 2018, Administrative Law Judge (ALJ) Ariel Sotolongo issued a decision finding that California Cartage and its subsidiary Orient Tally violated workers’ rights at the 2401 E. Pacific Coast Highway, warehouse, including by engaging in unlawful interrogation, implied threats of termination, and confronting workers in a physically aggressive fashion. This decision ordered the company to cease and desist the unlawful behavior, and was issued following a hearing held in June 2017. The case arose after Region 21 of the National Labor Relations Board issued a March 2016 Consolidated Complaint (Cases: 21-CA-160242 and 21-CA-162991) against California Cartage for unfair labor practice (ULP) charges.
In 2016, workers at the same warehouse filed additional ULP charges with the International Brotherhood of Teamsters against California Cartage for several unfair labor practices including then company owner Bob Curry threatening to close the warehouse if workers unionized. These charges are pending.
On December 17, 2014, workers from the California Cartage warehouse on Pacific Coast Highway at the Port of Los Angeles filed a class action lawsuit alleging millions of dollars in wage theft. The workers, many of whom are paid the state minimum wage and have worked through a staffing agency for years, are entitled to the benefits of the Los Angeles Living Wage Ordinance because the warehouse where they work is operated on City of Los Angeles property. Despite this, the workers at the warehouse have not been paid the applicable living wage rate in the 18 years since the ordinance passed.
Under the City of Los Angeles Living Wage Ordinance, Cal Cartage is currently required to provide each worker with either $12.52 per hour for an all-cash wage or $11.27 per hour plus $1.25 per hour in health benefits and as of July 1, 2017, it will go up to be $12.73 all-cash wage or $11.48 plus $1.25 in health benefits. Further, each worker is entitled to 12 paid days off per year. The law extends the obligation to any staffing agencies that are contracted by Cal Cartage and that directly employ more than 50 percent of the workers in the warehouse facility.
The case is currently in mediation proceedings.
NFI/Cal Cartage’s key customers include: Lowe’s, Amazon, TJ Maxx, Home Depot, Kmart, and Sears, as well as the U.S. Department of Defense.
It’s hardly new for politicians to wrangle over the National Labor Relations Board. This time, though, partisan warfare has penetrated the agency itself. | Jon Elswick/AP Photo
A federal agency that regulates labor unions is engaged in something close to civil war as political appointees, career bureaucrats and its inspector general battle one another.
The agency is the National Labor Relations Board, created in 1935 to promote collective bargaining and adjudicate disputes between businesses and workers. An independent agency insulated — in theory — from partisan politics, the NLRB under President Donald Trump is consumed to the point of paralysis by fights over personnel policies, ethics rules and legal decisions that stem from ancient political disagreements over the proper balance of power between employers and workers.
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The in-fighting is bad news for workers who seek the NLRB’s help to organize unions and increase corporate accountability for labor law violations — and also, paradoxically, bad news for employers who want to fight unionization and limit corporate liability by reversing pro-labor rulings issued under the Obama NLRB.
“This is like when Yugoslavia broke up,” said one employment lobbyist who spoke on the condition of anonymity. “You’re fighting over things that happened 10,000 years ago — you killed my ancestor so I’m going to kill you.”
At the center of the controversy, which has pitted civil servants against political appointees, conservatives against liberals and, on occasion, conservatives against other conservatives, are Peter Robb, the NLRB’s bare-knuckled general counsel, and board member William Emanuel, a controversial Trump appointee with deep ties to business.
Robb outraged the NLRB’s career staff in January by proposing a restructuring that would demote regional directors, whom the business lobby considers too pro-union. That prompted revolt from the NLRB’s employee unions. “Peter Robb is considering measures to ‘streamline’ the NLRB that will only make it harder to remedy federal labor law violations,” read a flyer that three New York union locals distributed at an event Robb attended in February.
Nearly 400 NLRB employees followed up March 15 in a letter sent to members of Congress that said Robb’s changes “strike us as unlikely to generate cost savings for the agency. What they do seem likely to achieve is the frustration of our efforts to provide members of the public with high quality, thorough investigation.”
The second and more elaborate NLRB controversy concerns Emanuel's decision not to recuse himself in December from Hy-Brand Industrial Contractors, a pro-business ruling in which the NLRB’s inspector general later concluded Emanuel had a conflict of interest. After the inspector general issued his report, the NLRB vacated the ruling.
The two story lines crossed this month when Robb issued a legal opinion that said he “does not agree with the conclusions reached in the IG report,” and accused three NLRB members of breaking the law. Robb faulted the members — including the Republican chairman — for vacating Hy-Brand without consulting Emanuel, and urged the board to reinstate Hy-Brand. It’s highly unusual for an NLRB general counsel to criticize the board’s judgment so harshly. The White House, signaling apparent agreement with Robb, replaced NLRB Chairman Marvin Kaplan last week with the just-confirmed board member John Ring. (Kaplan will remain as board member.)
Meanwhile, the NLRB’s inspector general, David Berry, is investigating a second NLRB member, Mark Pearce, who is one of the board’s two Democrats. (By law, two of the NLRB’s five board members are chosen by whichever party does not occupy the White House.) Berry is following on a complaint filed by the Competitive Enterprise Institute, a conservative nonprofit, based on a Wall Street Journal editorial that accused Pearce of alerting in advance attendees at an American Bar Association meeting in Puerto Rico that Hy-Brand would be vacated. Pearce did not answer a request for comment.
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Berry, in turn, stands accused by the National Right To Work Legal Defense Foundation, the legal arm of the anti-union National Right To Work Committee, of disclosing confidential board deliberations improperly in his report on Emanuel, and in a follow-up report issued one month later. The right-to-work group asked an umbrella group, the Council of the Inspectors General on Integrity and Efficiency, to investigate. Berry did not answer a request for comment.
“It’s sort of like 'Game of Thrones,'” said Roger King, a friend of Emanuel’s and senior labor and employment counsel for the HR Policy Association.
Or maybe three-dimensional chess. The National Right to Work Committee is a natural ally to Emanuel, but, remarkably, it’s come to regard Emanuel as a problem that must not be replicated in future NLRB nominations, lest pro-labor Democrats gain an upper hand through additional recusals.
In its March newsletter, the group revealed that the Trump administration ignored its advice “not to choose … another management attorney who would have to recuse himself or herself potentially from vast numbers of cases involving clients of the attorney’s former employer.” That advice, the newsletter complained, “went unheeded” when Trump nominated Ring, a partner at the management-side law firm Morgan, Lewis and Bockius, “whose client list is even longer than Littler Mendelson’s.” The Senate confirmed Ring last week.
“For the next year and a half,” warned National Right To Work Committee vice president Matthew Leen in the newsletter, “two of the three NLRB members who aren’t profoundly biased in favor of forced unionism may have to recuse themselves from multiple cases.”
In effect, Leen was saying that the Trump administration was so blatantly anti-labor that it may be unable to fulfill its anti-labor objectives.
It’s hardly new for politicians to wrangle over the NLRB. In 2012, the board made headlines when President Barack Obama tested the limits of his executive power by bypassing Congress and granting three recess appointments to the NLRB even though the Senate was technically in session. Obama ended up losing in the Supreme Court.
This time, though, partisan warfare has penetrated the agency itself.
General counsel Robb sent senior agency staffers reeling after he announced in a Jan. 11 conference call that he wanted to consolidate the agency’s 26 field offices into larger “districts” overseen by officials hand-picked by him. Under Robb’s plan, regional directors would lose their classification as members of the Senior Executive Service — the civil service’s highest rank — and be replaced by a new layer of officials who'd be answerable to Robb.
The title “general counsel” makes Robb sound like a lawyer for NLRB management, but in fact it’s arguably the agency’s most powerful position. The NLRB general counsel is the agency’s gatekeeper, a sort of prosecutor who brings cases before the board. The vast majority of NLRB cases are processed at the NLRB’s 26 field offices and never reach the board. The field offices are staffed by career officials who don’t typically agree with the pro-management outlook of Robb, to whom they report.
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In a letter to Robb shortly after the January conference call, the regional directors called his proposed changes “very major” and complained that they hadn’t “heard an explanation of the benefits to be gained.” They also warned that enacting such changes might prompt senior directors and managers to retire en masse — a clear shot across the bow.
In reply, another official from the general counsel’s office proposed by email additional restrictions on the decision-making power of regional officials, such as requiring all cases go through headquarters for initial review.
Robb declined to comment for this story and, according to a source familiar with his thinking, is upset that the controversy spilled into public view.
Marshall Babson, a former Democrat appointee to the NLRB, said that Robb’s proposed changes risk making the NLRB less efficient. “If you’re talking about injecting another level of review, that could slow things down,” he said.
Jennifer Abruzzo, who was acting general counsel before Robb, agreed. “I think that’s a mistake,” she said. “I think the regional directors know what they’re doing.”
Shifting rationales for the changes have intensified the career staff’s suspicions about Robb’s motives. At the March ABA meeting in Puerto Rico, Robb’s deputy John Kyle said they were intended to bring the agency in line with the White House’s proposed 9 percent budget cut for the agency. But the $1.3 trillion spending bill signed into law last month by President Donald Trump, H.R. 1625 (115), rejected that cut and maintained funding at current levels.
“It certainly undercuts the general counsel’s rationale for restructuring,” said Karen Cook, president of the NLRB Professional Association. “He will try to move forward with his plan, though, on the basis that he expects a severe cut to the 2019 budget.“
The budget picture grew more complex Tuesday when the White House budget office alerted NLRB that the agency should spend only $264 million of the $274 million it received in the spending bill, a 3.6 percent reduction. Such a rescission, were it to become permanent, would require congressional approval under the 1974 Congressional Budget and Impoundment Control Act.
“I am unaware of a single instance in the past wherein the White House or OMB subjected the NLRB to the budget rescission process,” said Marshall Babson, a former board member.
Fevered though the Robb Revolt is, it hasn’t yet engulfed members of the board itself. The same can’t be said about the controversy surrounding Emanuel and his participation in the December Hy-Brand decision.
Hy-Brand narrowed the circumstances under which a business could be classified a so-called joint employer, jointly liable for labor violations committed by its contractors or franchisees. It reversed an earlier ruling in Browning-Ferris Industries, a 2016 decision by the Obama NLRB that broadened the circumstances under which a business could be classified a joint employer. Fast-food chains like McDonald’s were outraged by Browning-Ferris because it put them on the hook for maltreatment of employees over whom they didn’t necessarily maintain direct control.
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Hy-Brand was rushed out along with several other pro-management decisions shortly before a Republican NLRB member’s term was about to end in December, leaving the board deadlocked, 2-2. The overturning of Browning-Ferris took many by surprise, because Hy-Brand wasn’t a case that had much to do with the joint-employer issue.
“It was a rush to judgment,” said Wilma Liebman, a Democratic board member under Presidents Bill Clinton, George W. Bush and Obama.
One week after the Hy-Brand ruling, congressional Democrats accused the NLRB of loading the dice by allowing Emanuel to participate. Emanuel’s former law firm, Littler Mendelson, had represented a party in Browning-Ferris, noted a Dec. 21 letter to Emanuel from Senate HELP Committee ranking member Patty Murray (D-Wash.), House Education and the Workforce Committee ranking member Bobby Scott (D-Va.) and others. In the letter, the six Democrats posed several questions to Emanuel about his participation in Hy-Brand.
In his response, first reported by ProPublica, Emanuel said he wasn’t aware at the time of the ruling that his firm had been involved in Browning-Ferris, noting Littler’s very long client list. Unfortunately for Emanuel, he’d already noted his firm’s participation in Browning-Ferris on a questionnaire submitted during his confirmation hearing. Emanuel scrambled to revise his response, but the damage was done, and inspector general Berry opened an investigation. The first report, issued Feb. 9, was scathing, finding “a serious and flagrant problem and/or deficiency in the board's administration of its deliberative process.” Emanuel, Berry concluded, should have recused himself from the decision to overturn the Obama-era standard.
The NLRB’s other three board members, including Trump-nominated chairman Marvin Kaplan, were persuaded by Berry’s reasoning and vacated Hy-Brand, waiting to act until after Emanuel departed for the ABA conference in Puerto Rico. Emanuel was stunned when a fellow attendee pulled up the ruling on a cellphone, according to a source who was present at the conference.
“You should have seen the look on his face,” this person said. “He had no knowledge of it in advance. He was totally floored.”
Emanuel, who declined to comment for this story, hired Zuckerman Spaeder, a prominent white-collar law firm that previously represented former International Monetary Fund Managing Director Dominique Strauss-Kahn.
Emanuel’s defenders insist he did nothing wrong because his firm wasn’t directly involved in Hy-Brand. Zuckerman Spaeder Chairman Dwight Bostwick argued in a letter to Berry that he'd evaluated Emanuel under an unusually strict standard that “has the potential to bedevil and frustrate this agency for years to come” and “‘weaponize’ the ethics rules for purposes of improperly excluding presidential appointees from doing the jobs they were sworn to do.”
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Bostwick also wrote that one month after the Hy-Brand decision, the NLRB’s designated ethics official told Emanuel that she didn’t believe Emanuel should have been required to recuse himself in that case. According to the letter, Emanuel asked for that opinion in writing, but the request was denied at the OIG’s request.
Emanuel’s allies have cried foul, noting that former Democratic NLRB member Craig Becker participated in cases involving local chapters of the Service Employees International Union despite having previously been counsel to SEIU. In that instance, Berry raised no red flags. Becker declined to comment on the record.
The conflict-of-interest charge is “based on a house of cards and not a very strong one at that,” said King, the attorney with the HR Policy Association. “We see a long-term game plan to destabilize and undermine the NLRB.”
In his second inspector general report on Emanuel, issued March 20, Berry concluded that Emanuel violated the Trump administration’s ethics pledge, which states: “I will not for a period for two years from the date of my appointment participate in any particular matter involving specific parties that is directly and substantially related to my former employer or former clients.” But in his letter to Berry, Bostwick said he “respectfully disagree[d] … with the determination the member Emanuel violated his presidential ethics pledge.”
Berry acquitted Emanuel of the most serious charge: lying to Congress about whether he was aware of a possible conflict of interest. But that did little to cool Congress' fury. After Berry issued the report, Sen. Elizabeth Warren (D-Mass.) and Rep. Keith Ellison (D-Minn.) called on Emanuel to resign, saying he “no longer has the credibility” to serve.
Portman at Today’s Joint Select Committee on Solvency of Multiemployer Pensions Plans Hearing: “The Status Quo is Unacceptable”
WASHINGTON, D.C. —At the second meeting of the Joint Select Committee on Solvency of Multiemployer PensionsPlans today, U.S. Senator Rob Portman (R-OH) made the case that the panel must work together on solutions that address the multiemployer pension crisis and deliver results, saying that, “the status quo is not acceptable.”Portman is hopeful that his colleagues on both sides of the aisle can come together to achieve a comprehensive and permanent solution that protects earned pensions, protects taxpayer dollars, prevents the insolvency of the Pension Benefit Guaranty Corporation, and alleviates pressure on employers. The focus of the hearing was on the legal structure and history of the multiemployer pension system, and Portman focused his questions on funding rules for plan sponsors and employer withdrawal liability, which are important issues in ensuring that plans can improve their solvency without placing an undue burden on contributing employers.
The Joint Select Committee on Solvency of Multiemployer Pension Plans consists of 16 members of Congress: four Republicans and four Democrats in the both the House and Senate. The deadline for the Committee to vote on a statement of findings and recommendations, and propose legislation to carry out these recommendations, is November 30th.In order to successfully report out legislation, a minimum of five out of the eight members of both parties must support it.
Transcript of the questioning can be found below and a video can be foundhere.
Portman: “The information that you are able to provide us is critical to helping us figure this out, and it is complicated, and there are different rules from multiemployers as we’ve talked about today. I think there’s a consensus around the table, I hope, that the status quo is not acceptable and that was your first summary comment, Mr. Goldman. I think, also, there is a deep interest in figuring out what we could do going forward to not just provide some solvency for Central States plan and PBGC that could otherwise go insolvent as soon as 2025, but also to put rules in place going forward that could solve some of the problems that have occurred, and one is withdrawal liability. You talked about that a little bit, Mr. Goldman, it was your third point, you said, ‘The status quo is not acceptable, many plans remain healthy’ and you talked about withdraw liability. Your point was that it keeps employers from being able to effectively help solve the problem, right?”
Mr. Ted Goldman, Senior Pensions Fellow at the American Academy of Actuaries: “Yes.”
Portman: “The key question I think we need to spend a lot of time on figuring out is the extent to which this insolvency is going to drive more employers into bankruptcy and create more issues, and one of the issues that concerns me is for the roughly 200 employers on Ohio and Central States, they would be reducing contributions for other multiemployer plans too, right? Creating a contagion effect, as you all call it. That threatens to compound the entire multiemployer system. There are many ways this could happen under current laws as evident from reading your report. The withdrawal liability issue and the possibility of a mass withdrawal, once Central States becomes insolvent. On page 46 of the Joint Committee report that we got, you noted, Mr. Barthold that the amount of an employer’s withdrawal liability is in theory determined by the plan’s sponsor and generally based on the employer’s portion of the plans unfunded, vested benefits. However, it is my understanding that the amount of withdrawal liability that employers actually pay is calculated based on their previous contributions to the plan and is payable with interest in annual installments and that those can last up to a maximum of 20 years and can also be paid in a lump sum based on that present value at 20 years, or it can be a negotiated solution between the plan sponsor and the employer. Can any of you comment on how often employers pay the full withdrawal liability, pay it off within the 20-year period, versus having some of the withdrawal liability forgiven at year 20?”
Mr. Tom Barthold, Chief of Staff of the Joint Committee on Taxation:“Senator Portman, I do not know the answer.”
Mr. Goldman: “It is not uncommon for employers to not pay that full liability. There is a mechanism that has a 20-year payment cap, and after you’ve paid those 20 years, you’re done. It doesn’t always necessarily align with the total amount you should have paid, so that’s another sort of leakage from the process and sometimes there is a negotiation up front and a lump sum settlement that is often well below the total value of that withdrawal liability, mostly dependent on the ability of the withdrawing employer to be able to pay, so it is better to get something than nothing.”
Portman: “It’s not uncommon, you’re saying, in that year 20, for you to have that withdrawal liability forgiven, causing leakage, and that money never comes back in. How would employer withdrawal burden change in the event of a mass withdrawal once a plan becomes insolvent?”
Mr. Goldman: “In the mass withdrawal, I’m blanking out on how that works. I’ll have to get back to you on that one.”
Portman: “I think when there’s a mass withdrawal there’s no 20-year cap on the payment.”
Mr. Goldman: “That’s right, there’s no 20-year cap and everybody has to pay up at that point.”
Portman: “Right, which is very hard to imagine, right? We have lots of issues here but one is, what is the current law, with regard to withdrawal liability, doing to make these plans even riskier and take away some of the possibility of us solving this problem? Another question that I’m not going to have time to ask but I would like to get an answer in writing if I could is, on the rate of return, what do we assume the rate of return is, which is really the discount rate---and I think in multi-employer plans is really seven to eight percent---and how often has that been true? In other words, is part of our problem here just that we have just estimated that there be a much higher return on investment then there actually has been?”
Mr. Goldman: “Yes, and by the way on the cap, you’re right, the cap goes away and a payment is in perpetuity in theory. On the interest rate, one thing to keep in mind is this is a very long-term pension plan and it does have a long timeline, a long investment horizon so you’re funding for people when they join the plan in their twenties and projecting out when they’re actually going to get their last payment at death. So, the long-term rate reflects long-term expectations and also reflects the investment mix of a plan so it is unique to a plan and each plan has to go through a process of assuring that the rate they select is defensible and appropriate.”
Portman: “If you could give me some comments in writing on how many times this seven or eight percent has been achieved, that would be great, thanks.”
Dear Union Leader,
Something is happening in America. A growing number of working people are recognizing that the best way to raise our own standing is by standing with the person next to us. Collective action is on the rise.
Building power for working people was the focus of our district meetings held from coast to coast over the past several weeks. Secretary-Treasurer Liz Shuler, Executive Vice President Tefere Gebre and I were inspired by the energy and enthusiasm local unions brought to each of these gatherings.
We talked about the threats of Janus and right to work and our power to overcome them. And we made some important asks like assigning local union coordinators, identifying elected officials who are union members and incorporating Common Sense Economics into your outreach.
We are bringing our vision of a robust, diverse and politically independent labor movement to life. Since our final district meeting April 10, more than 10,000 new members have joined our movement. Flight attendants at JetBlue (TWU), utility workers at Atlanta Gas Light (IBEW), registered nurses at Stanford Valley (CNA/NNU), health care workers at UMass Medical (AFSCME), personal support workers and registered nurses at Spectrum Health (IAM), editorial staff at the New Republic (TNG-CWA) and teaching and research assistants at Harvard University (UAW), just to name a few.
WASHINGTON -- TIME named Congresswoman Maxine Waters (D-CA-43), Ranking Member of the House Financial Services Committee, to the 2018 TIME 100, its annual list of the 100 most influential people in the world. The list, now in its fifteenth year, recognizes the activism, innovation and achievement of the world’s most influential individuals. The TIME tribute to Congresswoman Waters, written by Yara Shahidi, is below:
Congresswoman Maxine Waters of the 43rd District of California, a.k.a. Auntie Maxine, has made my generation proud to be nieces and nephews. She is adored and admired by people who care about social justice and is oh so eloquent in letting the world, particularly the white men of Congress who dare test her acumen, know that she is not here for any nonsense. From “reclaiming my time” to leading a movement to “impeach him,” she says what many of us are thinking. And she reminds us that we are worthy of any space we occupy.
You would think that 41 years of public service would make Congresswoman Waters tired, but her laser focus is unmatched. When other policymakers criminalize protests, she is there, verbalizing our pain. She fights for funding to support neglected communities. And she takes to Twitter to raise her voice on our behalf, whether or not Congress is in session. In this time of sociopolitical unrest, Congresswoman Waters has been the brilliant, tenacious representative of the people that we all need.
SUPPLEMENTAL PENSION & SUPPLEMENTAL DEATH BENEFITS Toll-free: (877) 214-8928
To schedule an appointment with the Pension (ONLY) field representative from the Western Conference of Teamsters Pension Trust please call Local 952 at (714) 740-6200. A pension representative comes to Local 952 every Thursday of the month from 9:00am to 4:00pm. If you wish to contact the pension department directly, please call one of the above numbers or visit www.nwadmin.com.
General Membership Meeting: General membership meetings of Local 952 are held the third Wednesday of each month, at 7:30 p.m. at 140 South Marks Way, Orange. Subject to a membership vote at the June membership meeting, and in accordance with the By-Laws of Local No. 952, Article XVII Section 1, the regular meetings have been suspended during the months of July, August and September and resume again in October.