The US Department of Labor has forbidden California transport company Cargomatic from “illegally shifting liability for labour law violations” onto its Ceva Logistics delivery drivers.
Cargomatic has contracted drivers to deliver cargo for Ceva Freight since 2019 – and since then, several drivers have filed suit for alleged labour violations.
In one claim, a driver claimed there had been failures to provide staff with rest and meal periods, to pay at least minimum wage for all hours worked, to reimburse them for all necessary business expenses and to pay them their final wages at the end of employment, among other grievances.
In response, Cargomatic threatened to countersue the drivers for more than $150,000 of attorney’s fees, which led to drivers also alleging the company intimidated them and threatened to terminate those who persisted in seeking unpaid wages and other remedies for the claimed violation of their rights.
However, the central district of California court announced yesterday that it had ordered the Long Beach transportation and logistics company to cease “repeated intimidation and threats” toward the drivers contracted to Ceva Freight.
According to the court document, Cargomatic had sent drivers involved in the Ceva lawsuit letters claiming they had “materially breached its terms of service agreements”.
The agreements included indemnity clauses that Cargomatic threatened to enforce against these workers to deter them from exercising their rights, along with an arbitration provision that barred them from seeking collective relief against the company for the unlawful indemnity clauses.
Regional solicitor in San Francisco Marc Pilotin said: “Employers should know better than to attempt to enforce indemnity clauses that purport to shift liability for wage and other labour law violations onto workers. Such provisions are coercive, retaliatory, illegal and unenforceable.
“The US Department of Labor will not tolerate retaliation against workers in any form, including when it involves—as here—employers invoking invalid terms buried in a contract’s fine print,” he added.
The multiple class-action lawsuits are ongoing, with some due to enter mediation early next year.
