Union Leaders, Port Truck Drivers Protest XPO Labor Practices at Shareholder Meeting

May 11, 2016 by Clarissa Hawes

Union leaders and port truck drivers staged a protest at the annual shareholders meeting of XPO Logistics Inc. Wednesday, alleging that the carrier engages in unfair business practices at ports in the U.S. and Europe.

The protest won a meeting with Bradley Jacobs, XPO founder and chief executive, and the company’s board of directors, for a small delegation of XPO drivers, Teamsters’ leaders and union representatives from Europe. They were in Greenwich, Conn., for the carrier’s shareholder meeting.

The group claims XPO failed to keep its promise not to lay off former Con-way Freight drivers after purchasing the less-than-truckload carrier for $3 billion in September 2015. Labor leaders in Europe said the company also broke its promise not to lay off employees for at least 18 months after purchasing Norbert Dentressangle S.A. for $3.5 billion a few months earlier.

Both purchases are part of Jacob’s strategy to consolidate other carriers into XPO.

XPO disputed the group’s claims, stating it was “obviously a publicity stunt by the Teamsters.”

“We have excellent relationships with our employees and the owner operators who serve our customers,” XPO said in a statement. “Our drivers and the owner operators we do business with are aware that we pay them more than their union counterparts in other companies. The Teamsters will have to look elsewhere for a way to solve their declining membership problem.”

Union leaders came away from the meeting disappointed.

Jacobs and board members declined to answer questions about the company’s business practices regarding the misclassification of drivers, said Fred Potter, international vice president and director of the Teamsters’ Port Division.

Union leaders also failed to get an answer on whether XPO plans take advantage of an amnesty program that is being offered to trucking companies working at ports in California that misclassify employees as independent contractors.

“We asked the company if they were going to take advantage of the amnesty program and Bradley Jacobs did not want to answer the question,” Potter told Trucks.com. “We were told it’s a legal issue and they couldn’t discuss pending legal matters with us.”

Potter said XPO independent contractors make an average of $28,000 before taxes, after rent, fuel, insurance and all repair costs are deducted from their paychecks.

The trucking industry’s classification of drivers as independent contractors has become a contentious issue, especially in California, which has the largest ports nationally. Since 2011, truckers have filed 799 wage claims due to employee misclassification, the California Labor Commissioner’s Office said. More than $35 million has been awarded to drivers in 302 cases.

Drivers from XPO, Pacific 9 Transportation and Intermodal Bridge Transport went on strike in Southern California last year to protest the issue.

The amnesty program would allow California companies to pay back wages to misclassified drivers and change their work status from independent contractor to employee drivers. In exchange, the companies would be relieved of any liability that may result in fines and other penalties.

While the Teamsters were protesting XPO labor practices, analysts were praising the company’s operations.

Stifel Transportation & Logistics Research Group has a buy rating on the carrier and a $40 per share price target. The stock closed at $27.78 Tuesday.

The management team is competently executing its corporate strategy of acquiring other carriers, Stifel analyst John Larkin said in a report to investors Tuesday.

“The company has been able to diagnose and remedy problems embedded at the former Pacer and at the former Con-way LTL remarkably quickly,” Larkin wrote.

XPO has avoided the missteps “one might expect” from a series of rapid acquisitions. Larkin said he “has never seen an integration take place so rapidly and with such fluidity.”

“Cross selling opportunities abound and are being vigorously explored and developed,” Larkin said. “Best practices are being shared across the operating units. Systems are being rapidly updated and integrated.”

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