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Pushing Trucking Labor Violations Into the Supply Chain
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In 2017, USA Today  ran a series of articles documenting labor abuses into trucking companies that operated in the ports of Los Angeles and Long Beach, California.  Brett Murphy, the author of the pieces, was a finalist for a Pulitzer Prize for reporting. The companies saddled their drivers with debt and resulting long hours so that the companies could meet the demands of large retailers such as Target and Costco.  The drivers, who picked up the goods at the ports, were driving trucks sold or leased to them by the trucking companies.  The drivers had to work 16-hour days just to meet their payments to the companies.  If the drivers failed to meet their payments or could not afford repairs to the trucks and stopped working, the companies would repossess the trucks.

 

Because of the long hours of the drivers, the trucking companies had complaints filed against them and, as a result, had millions in labor judgments against them, but they often simply shut down their businesses to avoid the judgments, only to re-open another trucking business under a different name. Their business with the so-called "large box retailers" continued. Brett Murphy, "Law Signed to Protect Truckers," USA Today, September 24, 2018, p. 1A.

 

However, due to the series by USA Today, the California legislature has now passed a law, to take effect in January 2019, that makes retail companies jointly liable for labor violations of port trucking companies. Under the bill, regulators will create a public list of those trucking companies that have not paid or have appealed labor judgments against them.  Any brands that continue to use those trucking companies will be jointly liable for any future labor violations of those companies. The legislation eliminates the "I had no idea" defense that the companies have used when notified of the labor issues.  The federal government has done something similar with companies that continue to use subcontractors (for janitorial, security, and other services) that have not properly screened their employees for legal employment in the United States.  Those companies can no longer use the defense that they simply subcontracted with a third party.  Now those companies must take steps to verify the subcontractors' employee verification systems. 

 

The use of pressure in the supply chain has been used to obtain reforms in labor conditions in other countries from which U.S. retailers obtain their goods.  For example, Nike, Apple, and clothing brands undertook oversight of their contractors around the world when public protests and sentiments expressed concerns about sweat-shop conditions and child labor.  Financial pressure in the supply chain on this who are not directly involved in violations can result in contract and supervision reforms that remedy abuses in other parts of the supply chain.

 

DISCUSSION STARTERS

 

Explain the new legislation in California.

Why is the legislation necessary? What will it accomplish?

How is the supply chain used by legislators and regulators?