A Minnesota carrier who closed its doors and allegedly shifted employees, clients, and even assets to a new company in order to avoid paying its drivers’ wages has been accused of wage theft and fraud by the Minnesota Department of Labor.
Lakeville Motor Express shut down just before Thanksgiving last year, claiming that they had run out of money and needed to close down their business. This left just shy of 100 employees out of a job, and missing out on pay for two weeks of work that they had already performed.
The number of employees at the time LME closed down is important. Minnesota has a law requiring any company with more than 100 employees to notify the state and their workers 60 days before closing down. This gives workers time to find themselves another job, and ensures that they receive their last paycheck.
In the months before their closure, LME started paring down the number of employees until they had just under 100. Once they had 95 employees, they closed the doors immediately, no longer needing to give advance notice to anyone. They also allegedly timed the closure precisely so it would happen just at the end of a pay cycle.
“Right before Thanksgiving, over 90 Minnesotans working for Lakeville Motor Express found out the company was closing its doors, and they wouldn’t be getting their final paycheck,” said Lt. Governor Tina Smith according to kstp.com. “This is called wage theft, and it’s the same thing as stealing. These families earned their wages fair and square, it’s wrong not to pay them, and we won’t tolerate it.
It appears that LME had been moving their employees over to a different company, Finish Line Express, which was established in May of 2016 by a former LME employee. But it wasn’t just LME employees that were making the change. Trucks, equipment, trailers, and even clients were being shuffled over to Finish Line in what appears to have been an attempt to move all of LME’s assets into a new company while leaving behind their debts and union contracts.
The lawsuit specifically names executives of the two companies and alleges that they fraudulently transferred the assets. The suit demands $370,000 in back wages and $154,400 in penalties.
Finish Line Express denies the allegations against it.
“We didn’t have anything at FLE that had anything to do with Lakeville Motor. We are a small company and are just trying to keep our people employed,” said Mike Sanford, a co-owner of Finish Line Express in an interview with Duluth News Tribune. “I feel bad for [the dismissed LME union workers], and we have taken a lot of abuse from everywhere, but we had nothing to do with [LME] letting their people go.”
Sanford claims that there was never any cross-ownership between the two carriers. But the Tribune points out that he is currently a co-owner of Finish Line Express while his LinkedIn page still lists his position as the vice president of operations at LME.
wow.
Greed everywhere. It’s a sad feeling to know that it can happen anywhere. Try going with no overtime pay for over two years. Couldn’t get nothing done either
Greed has been part of the human condition since the beginning. And to this level too. If this story is factual, I would like to see these folks get hit so hard with penalties that their ancestors scream for mercy. And I hope that the folks who were negatively affected get full compensation to the tune of twice what they were owed. I don’t to see only lawyers reaping the money.
It’s 100% factual, my friend since high school was one of the drivers there.
These crooked SOB’S have no morals, much less Dignity and even deny any wrongdoing, I hope the ones left without their pay, or pension have their day in court and get justice
Perhaps it was your grammar, or that while involved with interstate commerce you may be ineligible.
Shame about those poor hard workining union g,… er wait!
What? Union guys? Hard working?
Ah now it all makes sense,..
What difference does it make that they’re union workers. I’m a PROUD union driver. Twenty years of fair pay and great benefits.
No good, dirty SOB’s, I hope they can never get another decent driver and have to go out of business for real. It shows how stupid they are, believing that crap would actually work. They’d better count their blessings that all they’ll have to do is pay money. I know a couple of drivers that would have worried about the money AFTER they wore out a couple of heads.
Revenge isn’t right, but it sure feels good.
Sounds like one of the companies I worked for. There are MANY vile rotten trucking companies out there, who see the truckers (who BRING IN THE MONEY) as a
necessary evil! When this kind of behavior takes place, there ought to be a way of
going after the executives PERSONALLY, corporation or not. They usually bleed the companies white, then walk away, free as a bird, with their ill-gotten gains.
If I were him, I’d worry about a stray bullet.
That sounds a bit too humane!! How about tying him to the ground and driving a steam roller over him at a foot per minute!? That doesn’t even sound harsh enough!
Exactly. I like your thinking. If you need any gear to complete the thought, let me know. The drivers will still get their pay long after he has been removed from the gene pool.
When they give me my last paycheck, that’s when I will return their truck. Better hurry before I sell the rest of the tires and fuel
I think they should go to jail plus pay back all the money that’s owned
Nice to throw Union in the article, I may not be a fan of unions, but they work too and to dump everyone like that is bad business. This should show anybody that “you” are only as good as your usefulness, and when your not useful anymore your out. That goes for anything in life jobs, friendships & family. Sorry if that’s harsh but that reality and if anyone thinks these guys are going to get into trouble or pay out the full wages that ain’t happening either this will settle out of court.
I guess I’m missing something with this story. This is the third time I’ve read that LME has ceased operations. I live in South Dakota. I continue to see LME trucks all the time. Just seen one yesterday, in fact. Are the trucks running over here a non union division that didn’t shut down? Or have they resumed operations already after breakibg up the union?
It sounds like LME became FLE, moved people and equipment over and have not changed the trailers (and possibly tractors) to FLE put on them.
The LME terminal that closed was their only union shop out of 25+ terminals. It was privately owned like a fast food franchise.
These crooked SOB’S have no morals, much less Dignity and even deny any wrongdoing, I hope the ones left without their pay, or pension have their day in court and get justice
Welcome to the trucking industry.
The market in the twin cities has been really bad for over a year and a half now. People are doing work for so cheap and accepting loads from brokers way under what they should pay.
There’s a lot of companies out there that rob drivers blind. Like the ones who sign on drivers to be o/o’s and put money into what they call an escrow n then when the drivers leave because the company is starving them keep the escrow, that’s just one example. I hope these drivers get their day in court and take these companies to the cleaners, and I don’t feel it’s revenge when they get what they earned. Bout time someone starts clamping down on these crooked companies
That’s what happens when container rates get so low. The trucking market here is suffering.
All over money ?
Sounds like the union got a cut in the deal.
The State looked out for the drivers, not the union which they pay dues too.
No defense of LME intended, construed, or attempted, .
How about if the drivers affected go out and start their own companies, one truck or otherwise, and compete for the customers?
There’s a movie from the 1930s with Humphrey Bogart about the trucking business
Not one thing has changed since then, all the same arguments about brokers, big companies and so on.
If any complainer wants to make the industry better just start your own HONEST company. Make the world a better place by setting the example.
Just WON A CASE / SECRETARY ORDERS COMPANY TO PAY $2,200.00 A WEEK ,BACK PAY FOR 6 MONTHS!!, BUT WHO S GONNA COLLECT IT FOR ME ?? // CA. OHSA, HAS NO ANSWER?? WELL, IMAGINE THAT!!
Dick Simon Trucking/ now Central Transport.
JMAR Trucking/ Now Western Express/SMX/now Western Express.
C/F, Consolidated Freightways/now Total Transportation of Mississippi/ now US Express/Enterprises.
CFI/ now Con-Way Freight/now XPO/Logistics.
American Freightways/ now FEDEX.
Nothing new here, been going on for years; some have the political clout to pull it off and others do not.
Remember all trucking is is a “TAX SHELTER” for the rich corporate elites to hide their money and wealth from the IRS.
OUCH, poor drivers.
What are you talking about? You are smearing the names of some legitimate companies,they sold out but paid their employees and notified them accordingly,you have to be responsible before you imply that companies left their workers out to dry,wether its greed,growth,or a take over,as long as they cross their Ts and dot their i s,more power to them…and as far as trucking being a tax shelter… Mygosh!!!! You ve listened to one too many Bernie Sanders Communists R us infomercial.
You missed that Dick Simon/Central Transport is now owned by Swift and that Jim Palmer is in there too AND all of the Consolidated/Total/US Express AND CFI/ConWay/XPO Logistics mish mash ALL began as the UNION COMPANY CONSOLIDATED FREIGHTWAYS (or Corn Flakes as they were called on the c.b.) that locked their doors and ceased operations on the UNION LABOR DAY HOLIDAY. Those workers returned to work on Tuesday morning to find they had no work, no jobs, no nothing….sure stopped CF/ConWay et. al. from re-inventing, restructuring, re-labeling themselves and re-screwing everybody huh?
And then there’s Yellow Freight and Roadway Express that has become Yellow Roadway which other than Roadway’s failed attempt at package services like UPS and FedEx with RPS which was all probably one of the most humane and decently done mergers/change of operations. Of course anyone who got the short end of the stick in those deals from either their company or their union would disagree.
Scum of the Earth
This is where it’s time the government in Minnesota made an example of these useless individuals. Let’s start by freezing accounts and seizing assets!!! Auction off everything and give the proceeds to the employees. Then start doling out jail time!!
In a smaller scale,of course,but the name Arrow crossed my mind,low lifes cheating their workers,POS.
Union wages and benefits put them out. Oh well! They were gonna walkout if they didn’t get their demands met, anyway.
But no one should go wo a pay check…regardless of being a union cry baby or not. There’s no money! How will they pay union dues? Oops.
MTS / RTS out of Grand Rapids , Mi. did the same crap. They “merged” with as minority owned company and canceled all union agreements and kept right on as tho they did nothing wrong. They even kept the same headquarters in Grand Rapids but trucks said they were out of Pontiac, Mi. All the union drivers got really burned, I was one. Seems it happens all the time and the government just lets them keep it up.
The fact remains trucking Companies are accepting freight at too low of a rate and because margins are so thin they are taken over by bigger non union companies. We can only hope that as jobs return to the USA, wages will go up, margins will increase and companies will remain in business. The middle class has been ignored and taxed to death. Not the fault of the unions or companies but the government.
Dependable transport just closed it doorrs first of Jan,never thought they would be. So dirty withh employees ,no communication. Nothing.
I work in a warehouse that used Lakeville Motor Express (LME). The FLE drivers call in and identify themselves as LME drivers, yet their paperwork shows FLE. I recognized these drivers from when they worked for LME. Yup, shady business practices and I sincsrely hope those who weren’t hired on by FLE get their last paycheck they had coming to them! I hope the owner of LME loses all his personal wealth because of this. One thing you never mess with when running a business is payroll!
It wasn’t long after the union drivers got ousted so did non union July 12th 2019 left with out 3 weeks pay and now they are hauling the same freight lme hauled I hope nothing but the worst for all of them