Most of us know that the infamous “lease-to-own” agreements that some companies push on their drivers are generally a terrible, terrible deal. If you didn’t know that, think about it like this: If the company offers the program, it’s to make them more money. If they’re making more money, that likely means that they’re shifting costs away from them… and on to you. The lease agreements that they have drivers sign are generally pretty ironclad; there’s usually no backing out of one once you’ve put pen to paper. One particularly unscrupulous company has raised the bar for shady lease-to-own contracts in an almost impressively immoral way.
Green Fleet Systems, a trucking company that serves both the Port of Los Angeles and the Port of Long Beach, had your general run-of-the mill lease-to-own program going on. Drivers were paying so much in leasing fees and maintenance that they were barely breaking even every month with their paychecks.
It had become so intolerable that four drivers approached the California Labor Commissioner, a government office in charge of enforcing labor laws, and filed wage-and-hour claims against Green Fleet, asserting that they were in fact employees, not independent-contractors, and had been unlawfully misclassified. The labor commissioner agreed with the drivers, and determined that Green Fleet owed them a combined $280,000.
This is where it gets really shady.
In an attempt to keep their other drivers from doing exactly the same thing, Green Fleet required every lease operator to sign new leases that were supposed to limit their rights even further. The new leases said that if a driver ever does claim to be an employee, he or she will not only defend and hold the company harmless, but that they also agree to pay the company’s defense costs. So drivers could possibly be reclassified as employees, but only if they waive their right to demand back pay and pay for the lawyer that would argue against them.
Another section stated that any dispute regarding the lease would have to be settled by an arbitrator chosen by the company.
To top it all off, Green Fleets and nine other companies then filed a lawsuit that would prevent the Labor Commissioner’s office from enforcing the very laws that it was created to uphold. Specifically it would prevent the office from “investigating, processing, or proceeding to hearing on any claim” made by those ten companies’ drivers.
Of course, none of the changes that were made to the leases would hold up in court, their real goal is to prevent an uninformed driver from attempting to go to court because “hey, it says right here in your lease agreement that you can’t.” Fortunately, just because you’ve been able to get someone to unintentionally sign away their rights, doesn’t mean that those rights are actually gone.
It’s actually a good thing that those companies tried to shield themselves from impending lawsuits, it just makes it even clearer how guilty they really are.
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Source: citywatchla
John S says
Why is it that so many drivers fall into the trap of these contracts just to call themselves a owner operator? When in fact I call them something worse then a company driver. You basically pay what the company used to pay and make many times the same or less as you would as a company driver. If this proves anything its how bad things are as a company driver that pushes so many to jump from the fryer into the frying pan. But when you look at how little has been done to investigate these contracts. The only real protection is for drivers to not get involved in them.
George says
These companies are just as bad as pay day loan companies and rent to own furniture companies. They prey on uneducated segment of socity who don’t comprehend what their getting into. Like the Wildeabeast crossing the deep river and the crocks/crooks laying below the water to strike.
lee says
And people who want to get ahead.pay there bills.not be a well fair bum.
Atropa Belladonna says
I once tried a lease purchase at Stevens Transport when I was a brand new driver. I didn’t know any better and got out of a two year lease after 6 months. Next time I think of becoming a true O/O I will finance a truck through a dealer. Sadly, most of the lease programs are aimed at student drivers. Ignorance is bliss.
Truckbuddha says
Well look on the other side too. There are a lot of people that are succeeding as L/O. There are now companies that offer a variety of programs to help drivers better themselves and really try to get a head in life.
Yes, they found one bad apple and made it a news headline. (oh boy oh boy!) But that doesn’t make every company out here a criminal because they have L/O and other programs for their drivers.
It’s a shame that there are criminals and thieves and they are everywhere. But at the same time, there are honest people also.
Just IMHO, thanx
Corky Freeman says
No….. most are not reputable. Many have come and gone, all the way from Midwestern Distribution (the original “dollar down” scam artists) to North American Van lines. Most have been proven to be at best blatantly dishonest and at worst downright thieves.
Since deregulation the trucking industry has become as cutthroat as a tank full of sharks. In their never-ending quest to compete they have cut costs down to rock-bottom. And that includes drivers wages and benefits. Where can they continue to cut costs? Virtually the only place left is in driver remuneration. However they have trimmed that down to rock-bottom also and if they go any lower the risk of having no drivers at all. Henceforth the good old “lease purchase” scam.
Look at it from their point, a driver will give up his security, his benefit package, such as health insurance, vacation pay, sick leave (if any) retirement or 401 (k), Social Security payments and a whole plethora of other benefits. And for what? So you can strut around like cock of the walk at the truck stop pretending you’re something you’re not…… An owner operator. All you are is the victim of the disgusting scam you signed on to.
As mentioned before, they prey on the uneducated and naïve. Most of the people they sucker into this scheme are not qualified to be businessmen. All their buying is what they think are bragging rights. Follow a Dart truck down the road any day….. On the back of the doors are a picture of one of their suckers with the caption along the lines of “same day pay”, “I got my truck with nothing down” etc.
And just the very nature of this kind of scam indicates that any carrier that perpetuates it is not an honest or reputable entity. There are exceptions to the rule however, but they are so few and far between that they’re practically meaningless.
Hamm On Wry says
Corky: You mentioned the Dollar Specials. I got a truck from them in 1980, but soon heard some horror stories about the way that they would use the forced maintenance program to screw the guys out of their trucks when they were close to paying them off. The shop would pull the truck in and do major work on the truck and bill it to their accounts, throwing them farther in the hole.
From the beginning, I watched my statements like a hawk, and every few weeks, I would ask them the pay-off price, so they got used to the question. I also opened a bank account in Ft. Snott (misspelling intentional) and banked every dime that was not required to live on. One day when I was on the way into HQ, I got the payoff price and then dropped by the bank and got a cashier’s check for the amount.
I parked at the motel on the outskirts and told my second seat not to bring the truck in until I called him. Caught a cab in and went to the leasing department and paid the truck off. It was roughly $6,000 and they gave me the title.
When I came out, my truck was GONE! Nobody notified the shop that my truck was paid off and the lease ended. They had pulled it into the shop and put brand new tires on it, and done a scheduled maintenance, as well as replaced some other expensive parts. I only had roughly $500 in my security account. When they finished, I took the truck to the parking lot and, using my trusty hair dryer, took all MD identifiers off. Then drove to DMV and got permits to take the truck home. When I got home to CA, there were several calls on my machine from MD wanting their parts or payment. I told them that the parts were put on without my permission after I had paid them off, so I was considering it a gift, since the truck had not even been on their property until it was already mine. The truck engine had been overhauled less than 6 months earlier, that is what put my account so low.
Moral of the story? Stay out of L/P programs unless you are ready to play as dirty as they are. They will eat the nice guy/gal for lunch.
lee says
Name one or two.I would love to sign one.
Matt L. says
Jim Lawrence Transportation is one. Our lease/purchase program has been pretty successful, although it is admittedly tough. There’s no down payment, balloon payment, or any of the other crazy stuff I’ve heard about and a driver can walk away whenever they choose. The biggest problem we were facing was unreliable maintenance vendors decreasing productivity and driving up costs for our drivers. So we decided to build our own shop and handle things in-house. So far, it’s saved my guys a ton of money (the company too since we own the trailers), and everyone seems to be much happier. I don’t get why a company feels the need to be dishonest. It seems like the price of trying to replace all the drivers you run off would outweigh the profit but maybe not. Our L/P guys make about as much as our co. drivers, and that’s AFTER all fees and even a $180/week payment to maintenance escrow account. Consequently, it’s pretty easy to keep our trucks filled. If anyone is interested in working for an honest company that only asks that you work hard and stay honest with us, head on over to http://www.jimlawrencetrans.com and fill out an application.
bantyrooster says
at all cost avoid PTL OF KY. the safety director is a pure nut job. and when I was there the trucks they had in there lease program were nothing more then junk. tranny bad/blower bad/turbo blow/ junk. buyer BEWARE of that scum company.
trckrnana says
@bantyrooster, my husband has been driving for PTL for 10 months now. He is a company driver. They are about the same as most of the other companies he has worked for. His dispatcher is AWFUL! She is too lazy or too dumb to keep track of her board. She has him doing a lot of sitting because she doesn’t pre- plan. As for as leasing a truck-Celadon screwed him over big time. They took so much out every week that he didn’t get a paycheck for the last 6 weeks he drove. Live & learn!
mwc3 says
god you got that right
Johnny Fook says
The drayage industry in Los Angeles is a special kind of hell. I doubt that there’s a single company driver serving the ports, ’cause every one of those companies is trying to avoid having employees. Many of the so-call O/O are really employees, and most of the rest wish they were. The O/O system there exists only to keep the Teamsters away.
John says
These lease scams have been going on for years. I was refused employment once as an owner-op because I told the new students at that company how horrible the companies lease program was. Half the class dropped their leases. 685.00 a week is a refi culottes amount to pay for a truck that’s 3 years old then a balloon payment at the end is an insult. Ya can get a truck from a dealer for a thousand a MONTH with half assed good credit. It’s insane to pay 6-8 hundred a week for a truck, any truck.
Oscar Sanchez says
Been a trucker for 17 years I’ve seen alot, first of all for the guy up there saying “oh boy, oh boy they found one bad apple…”I can only wish it was this way, the sad sad true is that this is the norm; it would be surprising to find the “good apple”in the whole shameless bunch. Drivers, stay away from lease programs,save your cash and buy from dealer and get your own authority; even thougt you may have to work with a broker at least you can actually call most of the shots.
golddigger says
Dangle a truck in front of us and we bite. We get all puffed up thinking how impressive it is to say we own it. In reality we wouldn’t qualify for the rental at a video store, but now that we have a CDLA, our mere signature is good enough to get us the equivalent of a mortgage… nothing is too good to be true when you don’t want to see it.
Another tactic to get every penny they can out of their drivers, carriers that have a school often hold the newbies in hotel rooms or at home but off the road until they give in and sign lease or quit but with the burden of a contract to pay them almost 4000 for the school or not be able to work anywhere else. In effect they say pay the ransom.
Why do we do this? Many reasons. One of the dumbest I hear is because lease drivers at most companies are not force dispatched. So, just when your paycheck is now paying your bills and your truck payments, NOW YOUR SITTING AT HOME! ? The truck payments don’t stop just because you are able to decline a load for that big lawn ornament you just sold your soul for. I guess it makes sense for really experienced drivers who can decipher the crap loads from the value loads but guess what? Turn down to many and they stop offering any good ones to the diva driver.
The saddest part is that all this wisdom is within easy access to new drivers and even if they read it they will still think it is not going to happen to them. Some time began he who owns the property wins. From sharecroppers to miners right here in the last two hundred years people enslave themselves. “You load sixteen tons, what do you getAnother day older and deeper in debtSaint Peter don’t you call me ’cause I can’t goI owe my soul to the company store”…. ironically, long before semis that employer/ employee debt bondage system was called… ready? Truck system!
Kaiyla says
The last two companies I have been working for aren’t force dispatch. It really depends on what company you work for…
Although I’ll say it again, we truck drivers need to form unions again. It was all broken up in the 80s and we drivers have been shat on since and it just keeps getting worse. As a union you can stop shenanigans like CR England and this company here… And actually be paid and have decent benefits. But of course unions are “evil”….. Meh, no, they aren’t.
Slipkid says
@Kaiyla; anti union sentiment is ingrained in much of the American population. Truck drivers go to places that are unionized and see people they believe to be overpaid and appear not to be working very hard. What isn’t apparent to them is why. They lable it greedy and lazy but what is actually happening is these people have had the resolve to stand up to these companies that keep adding more and more work to your job description and shaving off more and more of your pay. They were able to force them to bargain by standing up for themselves. They have drawn a line and said we will do “X” amount of work for “X” amount of pay. And hold them to it by contract. But since unions are evil then you have what you have here, drivers complaining in a comment section about a company basically enslaving, by contract mind you, individuals that have little recourse other than bankruptcy and financial ruin. Companies couldn’t give a damn about your comments or your financial problems because there’s always fresh meat walking through the door. Nothing is gonna change until all the blood, sweat, and tears that gave this nation the work benefits and protections have been compleatly rolled back to a time before unions stopped the abuses. We’re not there yet but that’s what’s on the horizon. I know there are evils that come with unions but when choosing between evils it’s best to choose the one you have the most control over. I can vote for my union stewards. Without them you’re leving it up to one side deciding what’s fair. That never works out very good.
bilbo baggins says
I once was a teamster and don’t usually use the rhetoric about forcing the company to do this or that or stand up for my rights or getting respect. I use the simple rhetoric of a full days work for a full days pay. That about sums it up. They set up the work schedule, we fufill it and we get paid well for it. Each side wins.
bilbo baggins says
Correction. I meant a full days work for a fair days pay. Very important to stress full and fair.
Christopher Potvin says
One of the many things that really bug me about the fleece programs are how THEY dictate YOUR pay. It is simple math. You fleece on and absorb almost all of the operating cost of the truck while THEY are getting almost straight profit. But you can’t take your truck and leave. You can’t just log on to a load board and start dispatching yourself. You are still held to almost the same exact rules as a Company driver, but in truth a company driver probably makes more when He includes his benefit package, which you don’t have.
I could see maybe doing a short fleece just to see it you really like it or just to get a feel for it. But getting a newbie and then having him pay $500-650 PER WEEK making .92+ plus surcharge per mile. Anyone remember when They didn’t even have a surcharge? Then you have some that do pay a % of the load and then refuse to show you the freight charges to verify that you are indeed getting the correct percentage.
I have come to realize that becoming an O/O is the only way I will ever be happy in trucking. But I’m going to do it. I’m going to pay for my truck and trailer with cash, have a generous maintenance fund and I’m going to take my time building up to that. Trucking will still be there when I ready for it.
Jim says
Every lease operator deal is a scam. The guys who think they’re doing good are either real bad at math or haven’t had the IRS come after their HUT yet. I was talking to a England lease guy last week about it. We added up all his charges and expenses and I was making .22 more per mile as a company driver than him before breakdowns.
Toby says
A sucker and his $$$ soon part. Trucking – McDonald’s -wall marts on wheels with the exception – most of those jobs are better then trucker jobs
lee says
Does anyone know anything about RTI out of Kansas and Kentucky?.
bryon says
Funny……….everyone wants to complain about everything and everyone in the trucking industry but nothing will change because is all about me and not about us. We have to stand together to make the changes. Truckers were a family years ago but now ????????
Chipw says
I don’t know, I have two friends leasing now that are doing pretty well. One with CRST Malone and the other with some company out of Oregon or Washington with light blue trucks (don’t remember the name). Both are close to completing their leases.
Are there bad eggs out there, sure. Prime, England, Stevens, just to name a couple. But there are some that work for you too as long as you take the time to work it. Most fail because they come from 65 mph or less companies and get a 70+ mph truck and run it rather than saving fuel. They think a long 2000 mile run pays better than 4 500 mile runs. They don’t pay attention to where good freight is running. They idle their trucks too much and go home often.
Again, I know there are tons of bad lease companies out there, but there are also good ones and ones you can make work using a little bit of thinking. There are just too many people that go in with a company driver mentality rather than a business owner mentality.
Tim says
Stay away from lease purchase,nothing but a rip off
Henry C says
Leasing is certainly fleecing. You’re set up to fail. They give you a fixed deck and wonder why you are losing. I stress to anyone. Do not lease!
Patrick S says
I have been an O/O for over 20 years have hade my own Authority 13 trucks and 25 Dry Boxes let me tell you that Not all Leasing Programs are bad, sure you can pull a trac lease with the OEM’s for less but the concept in reality is still the same. Matter of fact most major carriers are in fact leasing most of their equipment because they need reliable schedules for new equipment to replace aging fleets. Bottom line is there are indeed some really bad apples out there but there are some programs where you can do really well if you have the business smarts to play the game. That’s right i said game, trucking after deregulation became nothing more then a highway evolved chess game with everybody chasing the queen (dollar bill) around the board. Because of this most don’t realize that the lease program is setup to support the companies mission and has a modal to it. If you follow the modal you can make money and get the title soon as you don’t you lose your cookies.
Things to remember
1, Don’t get owner syndrome (i.e refusing loads all the time, going home to much)
2. Learn about freight cycles and shipping lanes
3. Don’t just accept a blind settlement do your own math and always check and balance
4. Learn how to be a team player ( if you play for keeps you play to win)
5. It’s a game so read the rules and play smart
I know several drivers that have in fact completed lease programs and received title to the truck, I also know several that have used the lease modal to build fleets with major carriers. So for all
you folks saying there are zero good programs I say your not telling the truth because there are several good ones and even a few that are not attached to a carrier at all.
Leasing is not a bad thing and is just another way to do equipment acquisition and as with ownership provides a different set of IRS deductions and in fact can work minus intentional determination of the carrier to kill your bottomline so don’t bash what you don’t understand just because you don’t know how to play the game.