Major transportation trucking company files for Chapter 11 bankruptcy.
Recently, leading trucking company Premium Transportation Services Inc. filed for bankruptcy. The Chapter 11 filing came after the company dealt with several labor disputes and pressure to decrease fees from longstanding clients. As one of the largest transportation companies that served both the port of Los Angeles and Long Beach, filing Chapter 11 bankruptcy comes as a shock to the transportation industry.
Legal troubles began when independent contractor claims had been brought to the California Labor Commission. It was determined that the transportation company had misclassified their independent contractors. Many of the individuals that the company had classified as independent contractors should have been classified as employees. Losses for the company stand at $4 million in settlements and an additional $4 million in legal fees since suits began in 2014.
When it comes to labor laws, more and more port truckers have been working with the International Brotherhood of Teamsters Union. Together truckers and the union have worked to classify workers as employees instead of contractors and have been successful in a series of recent victories.
In addition to all their legal troubles, Premium Transportation Services, Inc. has faced issues with their consumers. Big clients for the transportation company have pressured Premium Transportation Services, Inc. into lowering their prices. While the company's prices started to dip, operating costs continued to increase.
The company's decision to file Chapter 11 bankruptcy comes at a time to help to stabilize the business as the company is $26 million dollars in debt.
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