Calif. Labor Commission Accused of Conflicts

LOS ANGELES (CN) - California's labor commission underwrites a law firm that sues trucking companies accused of misclassifying drivers, and presides over the appeals, a trucking firm claims in Federal Court.

WinWin Logistics sued Labor Commissioner Julie Su, the California Department of Industrial Relations and its Division of Labor Standards Enforcement on June 18, alleging due process violations.

WinWin, of Gardena, says the Department of Industrial Relations gave a $230,000 grant to the Wage Justice Center employment law firm in 2013, and "described its relationship with Wage Justice Center as a partnership."

The state grant was more than half the law firm's revenue in 2013 and nearly equaled its revenue in 2012, WinWin claims.

Soon after receiving the grant money, the Wage Justice Center filed a class action accusing WinWin others of misclassifying drivers as independent contractors, failing to reimburse drivers for expenses and taking illegal deductions.

The day the law firm filed that class action, Labor Commissioner Su issued a news release about a similar case and said she is "committed to attacking misclassification wherever it occurs in California," and that driver misclassification "is theft and we will do everything in our power to stop it."

Because of the state's "partnership" with the law firm, WinWin says, it "is being deprived of property without due process" and the state "does not provide a neutral forum for hearing these cases."

After the state "funds the prosecution of driver misclassification cases," including the class action against WinWin, it presides over the cases and handles appeals, WinWin says.

WinWin says it "cannot expect to receive, shall not receive, and has not received a fair and impartial determination in its driver misclassification cases pending before the DIR/DLSE."

To appealing a regulatory decision, WinWin says, it must post a bond equal to the award in the decision. It says it has 20 pending decisions that would require $4 million or more in bonds in order to appeal them.

WinWin says the cost of appealing regulatory decisions is "prohibitive," deprives it of due process and "threatens to destroy its entire business." And even if it does pay to appeal, the state's "adverse rulings inevitably taint the superior court's perspective ... before the matter is ever heard."

WinWin claims the state violates the 14th Amendment and the Due Process Clause of the California Constitution.

It seeks declaratory judgment, an injunction, damages and costs.

Su, WinWin and the Wage Justice Center were not immediately available for comment.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit