WASHINGTON — Trucking industry organizations are opposing President Joe Biden’s nominee for U.S. secretary of labor after she helped pass California’s AB5 law during her tenure as secretary of the California Labor and Workforce Development Agency.
On Wednesday, March 15, Biden called Julie Su a “real leader” who has supported unions, enforced worker safety and protected the victims of human trafficking.
“Julie is the American dream,” the president said in remarks at the White House. “She’s committed to making sure that dream is in reach for every American.”
American Trucking Associations (ATA) President and CEO Chris Spear and others in the trucking industry disagree.
“AB5 is designed to strip independent drivers of their choice and right to operate as contractors for motor carriers, in essence forcing them to become company employee drivers,” Spear wrote in a letter to the Senate on the issue. “It is wreaking havoc on thousands of self-employed, small-business owners by forcing them into legal limbo and placing administrative, compliance, legal and other unsustainable costs on the industry. As a result, families are leaving California to preserve their businesses, incomes, way of life, and choice to earn on their own terms as part of the American dream.”
In general terms, AB5 questions the legality of contracted/non-employee carriers, and it seeks to determine if independent contractors in California are employees or independent workers.
Additionally, Spear asks the Senate to consider the impact Su’s appointment could have on the trucking industry.
“Our trucking workforce is the supply chain’s most vital asset, and the Labor Secretary holds enormous influence over how it operates and to what effect,” Spear wrote.
Todd Spencer, president and CEO of the Owner-Operator Independent Drivers Association, has also expressed his concern over Su’s nomination, saying the Senate should “reject her nomination in order to protect the livelihoods and careers of the hard-working truckers we represent.”
More than 80% of U.S. communities rely entirely on trucking to meet their freight needs, and the industry moves 72.2% of the economy’s total tonnage each year, according to ATA statistics. Over the next decade, trucks will be tasked with moving 2.4 billion more tons of freight than they do today.
“The moment that slows or stops, the American people — your constituents — will want answers,” Spear wrote in his letter.
“We are concerned by Ms. Su’s public position on key issues, most notably her leading opposition to the right of drivers to operate as independent contractors — a cornerstone of trucking,” Spear wrote. “For 90 years, the economy and supply chain has benefited from the power of individuals to run their own trucking businesses. More than 90 percent of motor carriers operate six trucks or fewer, many of whom started as independent owner-operators and continue to operate in that capacity.”
Spear also notes that the freight economy is highly cyclical with seasonal surges and variability in consumer demand.
At the same time, he wrote, “we face chronic shortages of equipment and other resources. Our ability to successfully meet consumer expectations and the needs of families, businesses, and entire economic sectors is only made possible with the support of independent contractors.”
“This destructive policy failure is weakening the supply chain and threatens systemic disruptions nationwide if the federal government chooses a similar policy,” Spear wrote. “We are thus gravely concerned by the notice of proposed rulemaking published by USDOL’s (U.S. Department of Labor) Wage and Hour Division in October because it is very likely to have a similar effect to California’s AB5 if the proposal stands. Without the hundreds of thousands of independent owner-operators in our industry today, the supply chain would grind to an immediate halt, and a way of life of hundreds of thousands of small business men and women could be eradicated.”
In a statement, the Truckload Carriers Association has also expressed concern over Su’s nomination “due to her public opposition to the independent contractor business model — which is fundamental to the entrepreneurial DNA of the truckload industry.”
“Having served as the former Secretary of the California Labor and Workforce Development Agency, she helped pass AB5, forcing thousands of self-employed, owner-operators to weigh leaving the state or industry all-together, or giving up their hard-earned small businesses to become employee drivers,” the statement read. “If Ms. Su is confirmed as Labor Secretary, she will have considerable control over the agency’s enactment of a similar policy at the federal level. With this in mind, TCA asks that Ms. Su provide complete clarity over her intentions as the prospective agency chief regarding classification during the forthcoming nomination process.”
WHO IS SU?
The daughter of an immigrant mother who arrived on a cargo ship, Su said she believes “in the transformative power of America.” She noted that a union job gave her parents a path to the middle class, one that eventually led her to college at Stanford University and law school at Harvard University.
“To all workers who are toiling in the shadows, know that we see you, we stand with you, and we will fight for you,” Su said.
Su, the current deputy labor secretary, would replace the departing incumbent, former Boston Mayor Marty Walsh, whom Biden hailed by saying, “If I ever want anybody in the foxhole with me, I want Marty Walsh.”
A civil rights attorney and former head of California’s labor department, Su was central to negotiations between labor and freight rail companies late last year, working to avert an economically debilitating strike. She also has worked to broaden employee training programs and crack down on wage theft. If confirmed by the Senate, Su would also be the first Asian American in the Biden administration to serve in the Cabinet at the secretary level.
Su was considered to lead the department when Biden won the White House but instead became the department’s deputy. Walsh announced his intention to leave the administration earlier this month to lead the National Hockey League Players’ Association. Su will serve as the acting secretary until the Senate acts on her nomination.
Biden had been under pressure from the Congressional Asian Pacific American Caucus and other Asian American and Pacific Islander advocates to select Su to head the department. This administration was the first in more than two decades to not have a Cabinet secretary of AAPI descent, despite its regular declarations that it was the most diverse in history. Vice President Kamala Harris and U.S. Trade Representative Katherine Tai are of AAPI descent but don’t lead a Cabinet department.
Acknowledging twice the push by Sen. Tammy Duckworth, D-Ill., to have an AAPI Cabinet secretary, Biden joked Wednesday that if he didn’t pick Su, he would be “run out of town.”
Su, if confirmed, would also expand the majority of women serving in the president’s Cabinet. She was confirmed by the Senate to her current role in 2021 by a 50–47 vote.
Su’s nomination drew swift support from Democrats on Capitol Hill, with Senate Majority Leader Chuck Schumer saying Tuesday that she would be “phenomenal” in the job.
“The president couldn’t have picked a better nominee,” he told reporters. “I’m really excited about her, and we’re going to move to consider her nomination very, very quickly.”
But Louisiana Sen. Bill Cassidy, the top Republican on the Senate health, education and labor committee who opposed Su when she was selected for deputy secretary, called her work overseeing the department “troubling” and “anti-worker.”
The committee should “have a full and thorough hearing process,” Cassidy said.
In California, Gov. Gavin Newsom appointed Su to lead the state Labor and Workforce Development Agency, which included the department responsible for paying unemployment benefits during the pandemic.
The state had massive amount of fraud, estimated at $20 billion. Nearly all of that fraud was part of a hastily approved expansion of unemployment benefits by Congress that state officials said lacked key safeguards. But a state audit also blamed Newsom’s administration for “significant missteps and inaction.”
Rep. Judy Chu, D-Calif., who chairs the Congressional Asian Pacific American Caucus, said she was “overjoyed” by the selection, thanking Biden in a tweet for “nominating your first AAPI Cabinet Secretary!”
“It certainly is better late than never,” Chu said in a brief interview, citing CAPAC support for Su two years ago for the top Labor post and praising Su’s credentials as a leader and enforcer of labor laws including minimum wage and occupational safety standards. She said GOP criticism about Su had been fully vetted two years ago and that the coming confirmation process will show their charges “have no basis.”
Su’s nomination also comes at a key moment for labor unions, which have been facing a decline in membership for decades. Unions gained some momentum as workers at major employers such as Amazon and Starbucks pushed to unionize. But Biden — an avowed pro-union president — had to work with Congress to impose a contract on rail workers last year to avoid a possible strike.
The Labor Department said just 10.1% of workers last year were union members. That figure has been cut nearly in half since 1983 and could fall further, as younger workers are less likely to belong to unions.
The Associated Press contributed to this story.
Born in Pine Bluff, Arkansas, and raised in East Texas, John Worthen returned to his home state to attend college in 1998 and decided to make his life in The Natural State. Worthen is a 20-year veteran of the journalism industry and has covered just about every topic there is. He has a passion for writing and telling stories. He has worked as a beat reporter and bureau chief for a statewide newspaper and as managing editor of a regional newspaper in Arkansas. Additionally, Worthen has been a prolific freelance journalist for two decades, and has been published in several travel magazines and on travel websites.
Has this person even SEEN a truck,let alone sat in one or…gasp… ACTUALLY DRIVEN ONE ????? Just ANOTHER POSident joebiden woke hire…
She’s another politician determined to destroy any business. If they can destroy trucking they can destroy any other industry.
This article was clearly written for ignorant individuals, folks devoid of critical thinking skills.
The benefits of having independent contractors is extremely lucrative for a trucking company. Shady greed motivated trucking companies all over the USA lease out their trucks to drivers and have them sign contracts that denies them of all the stipulations that would make these drivers truly independent contractors.
So much of the choice and rights of a true independent contractor is taken away by these shady trucking companies that they may as well be called company drivers.
Trucking companys do this to avoid the cost associated with company driver employees, massively increase their profits at the expense of their so called Independent contractors, and to control the drivers.
An independent contractors earnings should never be close to what a company drivers makes. An independent contractor at a minumum should take home 3-4 times more than a company driver and should be a lot more for individuals that bring their own trucks to a trucking company.
A lot of expense is involved with owning a truck and likely even more when leasing them from a trucking company. Based on all the expenses that these Shady trucking companies dump on their Independent contractors(pretty much all)at a minimum an Independent contractor should get $2.60cpm(again, more for those that lease on with their own trucks. Trucking companies that lease their trucks are no different than mortgage predators. These trucking companies feels that their low BS $1.10 – $1.50cpm offers are perfectly fine because you are leasing a truck from them. You will be miling yourself to death trying to keep things afloat at those rates.
California AB5 law was created to address the unscrupulous actions of shady trucking companies that take away the rights and choice of Independent contractors and still want to classify them as Independent Contractors.