Wednesday, June 21, 2017

Rent-To-Own Rackets Not Limited To Dilapidated Homes; Many Trucking Outfits Use Business Model To Rope Their Drivers Into One-Sided, 'Take-It-Or Leave-It' Lease Contracts For Company Trucks In Arrangements That Leave Many Working For Peanuts & Under Threat Of Losing Everything They've Paid If They Miss One Payment

In Los Angeles, California, USA Today reports:
  • Samuel Talavera Jr. did everything his bosses asked.

    Most days, the trucker would drive more than 16 hours straight hauling LG dishwashers and Kumho tires to warehouses around Los Angeles, on their way to retail stores nationwide.

    He rarely went home to his family. At night, he crawled into the back of his cab and slept in the company parking lot.

    For all of that, he took home as little as 67 cents a week.

    Then, in October 2013, the truck he leased from his employer, QTS, broke down.

    When Talavera could not afford repairs, the company fired him and seized the truck -- along with $78,000 he had paid towards owning it.

    Talavera was a modern-day indentured servant. And there are hundreds, likely thousands more, still on the road, hauling containers for trucking companies that move goods for America’s most beloved retailers, from Costco to Target to Home Depot.

    These port truckers -- many of them poor immigrants who speak little English -- are responsible for moving almost half of the nation’s container imports out of Los Angeles’ ports. They don't deliver goods to stores. Instead they drive them short distances to warehouses and rail yards, one small step on their journey to a store near you.

    A yearlong investigation by the USA TODAY Network found that port trucking companies in southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford. Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute.

    If a driver quit, the company seized his truck and kept everything he had paid towards owning it.

    If drivers missed payments, or if they got sick or became too exhausted to go on, their companies fired them and kept everything. Then they turned around and leased the trucks to someone else.

    Drivers who manage to hang on to their jobs sometimes end up owing money to their employers – essentially working for free. Reporters identified seven different companies that have told their employees they owe money at week’s end.

    The USA TODAY Network pieced together accounts from more than 300 drivers, listened to hundreds of hours of sworn labor dispute testimony and reviewed contracts that have never been seen by the public.

    Using the contracts, submitted as evidence in labor complaints, and shipping manifests, reporters matched the trucking companies with the most labor violations to dozens of retail brands, including Target, Hewlett-Packard, Home Depot, Hasbro, J.Crew, UPS, Goodyear, Costco, Ralph Lauren and more.
    ***
    There are 800 companies regularly operating at the LA ports. Almost all of them turned to some form of a lease-to-own model, some without thinking through the consequences, said industry consultant and lobbyist Alex Cherin.

    “Flying by the seat of their pants and making it up as they went along,” he said of the scramble to find trucks for drivers. “Ultimately what they were trying to do was survive in a business with very thin margins.”

    Truckers at dozens of companies describe the same basic scene. They were handed a lease-to-own contract by their employer and given a choice: Sign immediately or be fired. Many drivers who spoke little English said managers gave them no time to seek legal advice or even an interpreter to read the contract.

    It was "take it or leave it," according to Fidel Vasquez, a driver for Total Transportation who said he couldn’t read the contract because it was in English.

    Jose Juan Rodriguez owned his own truck and drove primarily for Morgan Southern, where two dozen drivers have filed claims for back pay at the California labor commission and civil court. Like many drivers, Rodriguez said he didn’t understand what he was signing, but felt he had no choice.

    His wife has stage three breast cancer and his adult son has severe brain damage requiring frequent doctor visits.

    “Where do I sign?” Rodriguez recalled asking right away. “The only thing I had to worry about is work, because I have a family.”

    One-sided contracts

    The contracts work like sub-leases. Knowing drivers could not qualify for their own loans or leases, trucking companies arranged to finance their fleets. Then they had drivers sign up for individual trucks.

    Drivers gave their old trucks – many of which they owned outright – to their company as a down payment. And just like that they were up to $100,000 in debt to their own employer. The same guys would have had a tough time qualifying for a Hyundai days earlier.

    As far back as August 2008, a trucking finance firm warned Port of Long Beach board members that 40% of drivers were likely to default on truck leases. But no one stopped the deals, which place almost all of the financial risk onto the workers.

    Drivers' names were not on the truck titles. And many contracts effectively barred drivers from using their truck to work for other companies.

    The companies also retained the power to decide how much work to give their drivers. They decide who gets the easiest and most lucrative routes -- and who gets to work at all.

    That leaves drivers in constant fear of upsetting managers, who can fire them for any reason, or simply stop sending them business, a process some call “starving” them out of the truck.

    On a five-year lease, drivers could pay in for four years and 11 months. If they got sick, fell behind on the lease or were fired in the last month, they could lose everything – as if they had never paid a dime.

    [...]

Links to this post:

Create a Link

<< Home