One of Southern California’s largest port trucking companies filed for chapter 11 bankruptcy protection on March 14, 2016. The company reported that downward pricing pressure and costs associated with worker misclassification litigation became insurmountable.
The company reportedly lost eleven misclassification claims before the California Labor Commission and fourteen lawsuits in state court, which resulted in the company spending millions of dollars to litigate these cases and millions more to pay awards and damages.
This unfortunate situation demonstrates the crippling effects of today’s regulatory environment on companies that do business with independent contractors.
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