Saybrook in talks to resolve dispute between labor and portfolio company TTSI

The Los Angeles-based firm and TTSI have engaged in “productive” discussions with organized labor, which has criticized the company for allegedly misclassifying its truck drivers as independent contractors, rather than full-time employees, sources said.

The ongoing discussions halted one limited partner’s plan to send a letter to Saybrook expressing its concerns with the investment. The letter, from the Los Angeles City Employees’ Retirement System (LACERS), would have urged the firm to engage with labor and representatives from the International Brotherhood of Teamsters. The retirement system decided against sending that letter when it became clear Saybrook and TTSI had already begun talks with the Teamsters.

“We were in the process of drafting a letter,” LACERS Commissioner Elizabeth Greenwood said. “It got tabled because, in my understanding, both sides are talking and that it is going well… It is, at this point, really the best we could hope for.”

Another Saybrook LP, the Los Angeles Fire and Police Pensions (LAFPP), sent a letter to Saybrook on Nov. 6 urging the firm to resolve matters with TTSI and “protect the interests of your limited partners,” according to a copy of the letter made available to Buyouts.

Saybrook had not issued a formal response to the letter as of press time, though the firm did acknowledge it was participating in discussions, said LAFPP General Manager Ray Ciranna.

LACERS and LAFPP are limited in partners in Saybrook’s $350 million debut fund, which was used to recapitalize TTSI in 2011. Saybrook Portfolio Manager Jonathan Rosenthal, who serves on TTSI’s board, declined to comment. TTSI did not respond to requests for comment.

Labor dispute

TTSI leases company-owned trucks to drivers through independent contractor agreements, charging drivers approximately $1,600 per month for use of the truck. Under those agreements, the company pays drivers for every cargo container they move, minus deductions for the cost of fuel, maintenance, insurance and registration.

Many drivers have argued their relationship with TTSI was more like that of an employee and employer, pointing to a clause in the agreement that restricts the use of leased trucks to jobs arranged by TTSI, as well as company dispatchers’ control over which drivers are assigned to which job.

Several drivers brought their claims to the California Department of Industrial Relations’ Division of Labor Standards Enforcement. Through late October, the DLSE had ruled against TTSI in 17 cases, saying the company owed more than $1.2 million to drivers in the form of unpaid wages, reimbursements and interest.

In addition to bringing their case to the DLSE, drivers also aired their complaints at meetings held by some of Saybrook’s public pension LPs. TTSI President Vic La Rosa responded to those presentations with a Sept. 11 letter to LACERS that characterized the complaints as “nothing more than an ongoing attempt to unionize independent contractors.” The letter went on to say organizers were trying to “discredit the stellar reputation TTSI has built over the last 20 years in business” by engaging with Saybrook’s limited partners.

The labor effort involved several strikes, including a walkout in November, which eventually prompted Los Angeles Mayor Eric Garcetti to facilitate discussions among the company’s various stakeholders.

“It’s in everyone’s best interest that goods are going through the port, and that people are working at the port,” Garcetti spokesman Yusef Robb said, adding: “Broadly speaking, we’ve backed fair treatment for labor at the port.”

In November, Garcetti released a statement thanking TTSI for its willingness to “sit down with our office and the Teamsters to find a way to get its operation back to work.”

The discussions remained ongoing at press time.