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Adolfo Arzate et al v. Bridge Terminal Transport

January 31, 2011


(Los Angeles County Super. Ct. No. BC 380497) APPEAL from a judgment of the Superior Court for the County of Los Angeles. Joanne B. O'Donnell, Judge. Reversed and remanded.

The opinion of the court was delivered by: Grimes, J.



Plaintiffs Adolfo Arzate and Juan Ortiz, members of the Teamsters Union who own their own trucks, brought this wage and hour class action on behalf of truck drivers who were paid by defendant Bridge Terminal Transport, Inc., to transport cargo between ports and the facilities of defendant's customers. Plaintiffs alleged they were defendant's employees, and asserted causes of action under the Labor Code for failure to pay minimum wages, failure to pay all wages due upon discharge, and failure to provide itemized wage statements, along with a cause of action for unfair business practices.

Defendant moved for summary judgment on the ground that plaintiffs were independent contractors, not employees. The trial court granted defendant's motion and entered judgment for defendant. We reverse the judgment.


The time period for this putative class action is November 2003 to December 2007. The evidence presented in support of and opposition to defendant's summary judgment motion established the following undisputed facts.

Defendant is in the business of arranging for the transportation of its customers' cargo between ports or terminals and the customers' facilities. While defendant did not own any trucks at any time relevant to this case, it holds itself out as a "common carrier by motor vehicle, engaged in the business of transportation of property under authority from the Federal Highway Administration . . . ." Defendant uses truck drivers like plaintiffs, who own their own trucks, to transport the cargo.

Plaintiffs are members of the Teamsters Union, which at all relevant times had a collective bargaining agreement (CBA) with defendant. The CBA covered the movement of intermodal traffic into and out of the ports of Los Angeles/Long Beach and San Diego, and governed defendant's "use of 'owner/operators' " domiciled in those ports and in San Bernardino. Plaintiffs were among a type of owner-operator described in the CBA as "employee owner/operators" -- defined as "drivers who work exclusively for a single Employer on a regular basis and whose manner, means and details of work are determined by the Employer as well as the ends of work to be accomplished . . . ." A second "distinct type[]" of owner/operator was an "Independent Contractor Owner Operator[]"; it was "only that kind of owner/operators who do hauling work on an intermittent basis for different Employers."

All employee owner-operators were subject to the CBA, which provided that they "shall work exclusively for their Employer and for no other interests." Defendant presented declarations and deposition testimony stating this provision was not enforced, and therefore, "employee [o]wner-operators" had the opportunity to work for other companies, and "some actually did." Defendant did not identify any such instances. Plaintiffs declared that they knew of no other driver who worked for another company at the same time, they were never informed they could do so or that defendant would not enforce its right to prohibit them from doing so, and there was no reason for them to believe that defendant would not enforce that right.

Plaintiffs and defendant signed lease agreements under which each plaintiff as lessor leased the truck he owned to defendant as lessee, to be used for hauling cargo for defendant. Among other things, the leases provided that the lessee -- defendant -- "shall have the exclusive possession, control and use of" the plaintiffs' trucks and "shall assume full responsibility for the operation of the equipment for the duration of the lease." The leases were for a term of 30 days, with automatic renewal after 30 days unless cancelled by either party on one day's written notice. Plaintiff Arzate and defendant signed a contract in May 2004 (along with a lease agreement signed on the same date) in which Arzate was denominated the "contractor" and which stated that the parties intended to create a relationship of independent contractor, not employer-employee. The contract stated that Arzate was "responsible for controlling the method and means by which the motor vehicle equipment is operated," but this was subject to defendant's "exclusive possession, control, and use of the equipment" and defendant's "complete responsibility for the operation of the equipment . . . ." This contract, too, was terminable on 24 hours' notice.

The CBA provided that where there is a conflict between the lease agreements and the CBA, the terms and conditions of the CBA "shall have precedence."

Plaintiffs paid all expenses (fuel, registration, maintenance, repairs, taxes, insurance) to maintain and operate their trucks, and selected which certified mechanics to use for maintenance and repairs. Defendant provided placards with the company name that were required to be affixed to the trucks.

In compensation, plaintiffs regularly received two checks from defendant. One check (for 75 percent of the total compensation) was paid for the lease of the truck, and the other check (for 25 percent of the total) was for plaintiffs' services as drivers (and was denominated in the CBA as "employee wages"). The second check was denominated a "[p]ayroll check," and defendant deducted federal, state, Social Security, Medicare and state "SUI/SDI" taxes from the plaintiffs' "gross pay." Defendant also issued W-2 wage and tax statements with respect to the amounts paid for plaintiffs' services which showed plaintiffs as employees. Defendant gave plaintiffs the option to participate in a health insurance plan provided through defendant ...

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