The long-established practice of licensed motor carriers hiring owner-operators to haul containers in and out of the Port of Los Angeles and Port of Long Beach is under fire at the federal, state and local levels of government, as well as from organized labor. Members of the House Transportation Subcommittee on Highways and Transit called for a Congressional investigation of driver status following a May 5 hearing on the Los Angeles and Long Beach ports' clean truck programs.

The hearing had little to do with the clean truck program and everything to do with economics and driver misclassification, said attorney Alex Cherin, who represents the Harbor Truckers for a Sustainable Future and is the former Long Beach port managing director of trade and operations. He warned members of the trucking community at a HTFSF meeting in Long Beach last week to expect a major assault on the status of drivers - the question being whether the contract drivers are legally independent business people or employees.

The issue is less than clear, even in the best of times. There are several tests used to determine whether or not a worker is an independent contractor or an employee, but all of the tests are subjective and none of them by itself is conclusive.

In the end it comes down to a "smell test," said Bob Roginson, a labor attorney at Atkinson, Andelson, Loya, Ruud & Romo. "It's the totality of circumstances."

In other words, whether a worker is legally an employee or a contractor is usually determined in the nose of the beholder. After hearing all the facts, a judge or some other official will decide by taking everything into consideration, including his own preconceptions.

For the most part, the status of drivers has been tested in the court and as long as the company has carefully maintained the proper legal distinction between the driver as contractor and the driver as employee, the position that the driver is an independent business person has usually prevailed.

One of the things that has changed, however, is the use of leases.

When the ports mandated as part of their clean truck programs that only late-model, clean-burning trucks would be allowed in port terminals, it was apparent that most of the contract drivers could not afford new rigs, which each cost $100,000 or more.

The harbor-area trucking companies invested more than half-a-billion dollars in updating the fleets, and then leased the trucks to the drivers - sometimes as part of a lease-purchase agreement. Leasing the truck to the driver, would suggest a permanent relationship between the company and driver and tend to favor the view that the driver is in reality an employee, rather than an independent businessman, Roginson said. It would not by itself, however, be conclusive, he added.

Roginson is the former Chief Counsel for the California Division of Labor Standards Enforcement, appointed to that post by Governor Arnold Schwarzenegger.

There is a belief by some that independent contractors may be less than forthcoming on their taxes and that their contractor status costs the government revenues it would have gotten if they had been employees. Because of that, there is some legislative pressure to change the law to make it harder for independent contractors to operate.

In California, Schwarzenegger has vetoed such bills, saying it would further discourage business in California. When a new governor assumes office that may change, Roginson warned, especially if the winning candidate is former Governor Jerry Brown.

Brown, who is now California Attorney General, has launched several suits against harbor-area trucking companies that he claims are using drivers as employees, but classifying them as independent contractors. Those suits so far have drawn some mixed results.

At the federal level, actions to crack down on what determines an independent contractor have already begun, Roginson said. Labor Secretary Hilda Solis plans to hire 100 new investigators whose jobs will be to focus on misclassification of contractors.

The Teamsters Union - whose officials testified at the May 5 hearing - wants the drivers to be declared employees so they can organize them into the union. As independent contractors they cannot legally be part of a union.

The Port of Los Angeles is currently awaiting a decision in a lawsuit brought against it by the American Trucking Associations over the port's clean truck concession program. One of the main issues in question is whether the port has the jurisdiction under federal law to ban contract drivers from port terminals.

The Port of Los Angeles is engaged in an effort to convince Congress to change federal law to allow the port to regulate interstate trucking in order to clean up the environment. The Teamsters and various environmental organizations are also campaigning for the change.