Lawsuit Against Swift Transportation Forced labor Minimum wageThis lawsuit is brought

In 2009, I had to incorporate. Why? Because lawsuits had been filed against others in the industry by pathetic excuses for I/C's who screwed up and rather than taking responsibility for their screw-up, they chose to sue the carrier claiming to be misclassified as an I/C when they were really an employee.

In response to those lawsuits, the carrier I had my truck leased on with decided to cover their rear and no longer would deal with "sole proprietors". If you want to lease on, you've got to incorporate...and your corporation can then lease it's fleet of however many trucks it owns on to run under the carrier's authority.

Hasn't really changed my operation, other than it cost me $500 to set up the LLC and $250/year to keep it active. That's money I'd much rather keep in my pocket.

So yeah, this specific lawsuit is against Swift...but its ramifications will stretch industry wide, because the outcome of the case sets a legal precedent. Suppose one day the courts rule that even O/O's running under a carrier's authority are actually employees of the carrier? Instead of just having to incorporate, we'd all have to get our own authority and basically rent trailers and broker loads through the carrier we are now leased to.....or sell our trucks because it wouldn't be profitable to run them under someone else's authority if we were classified as employees.

Neither of those is acceptable.

 

If I make an agreement with someone or a company, then I will do whatever is possible to abide by my agreement. Some of what the IRS states is subjective. There are many exceptions to their own rules. If I were to sign a lease purchase I would expect to pay my own taxes and pay all costs associated with the agreement.

I would be more inclined to believe that these former lease operators had been taken advantage of had they not mentioned in their complaint that they were seeking employee status and wanted to recover any taxes or have Swift pay their taxes. Having said that, I still think that these people could not make it and now want to blame the carrier.

 

Maybe....But I am not depending on the person that holds the title to my truck to give me the work that I need to pay for it....When it is in their best interest that I fail at some point and they get the truck back after I paid for most of it.
I am not "locked" into any one carrier, I can go wherever I please and take my truck and trailer with me if I'm not making money with a carrier.

To enter into any contract without reading and understanding what's in it is to say the least....Foolish!


An O/O has autonomy....A L/O has none.

That is what I'm referring to when I say that it's a "fools game".

 

Subjective to an IRS auditor, perhaps.

 

From what I gathered...these were on the port fleet, and were prior to signing the lease. Knowing this, they did not get enough miles each week to maintain the lease and take home $$$. Should Swift have warned them and showed them their own "miles history" while on this fleet to attempt to dissuade them from the lease? Did Swift do this? We don't know!

On my first lease...this is how IEL determined if I could be successful...by my own history with what I was doing...and they made it a strong point that "xxx" miles were required on a regular average basis for me to succeed. However, on the second lease, this counseling was not done for me...maybe because I was expected to know from the previous lease.

These are two points that aren't indicated in any brief or statements regarding this suit. As Injun stated....I'm done with this till the court renders a decision.

 

Point taken. It would be great if the only thing that comes out of this lawsuit is that a carrier is required to follow to the letter of the definition of an independent contractor, which, by the way, is exactly what you've just covered.

I agree with you.

I understand what you're saying and I agree that is the status quo. However, when the contract states the party entering into the agreement is referred throughout the contract as an independent contractor, for all intents and purposes, should be exactly what is stated......independent, having the autonomy to pursue freight elsewhere when the carrier doesn't have any loads for the IC, thereby insuring the IC's continued success. There is no room for semantics in a contract. They are either an IC or they are an employee, no other choices, this is per the IRS. If they are truly an IC, then they, by law, are entitled to pursue work outside the carrier.

 

LOL And then when they're done, it will no longer be subjective, but objective.

 

Good luck with that....

Swift will cancel the whole program before they allow that. The only reason that they started the L/O program in the first place was to get someone else to pay for the truck and the fuel while letting them believe that they were an independent when they are in fact...Just company drivers, Paying for a company truck.

 

While I have a tendency to agree with you, that's contrary to what Injun said, that they send them back to the dealer after the lease, they don't buy them. I'm very skeptical about that though.

I doubt seriously that Swift would cancel the whole program, they make too much profit from the L/O's they do have to give it up. Oh, and my comment was based on what the IRS said.

 

Swift may have given these lease operators the information. It may be that the lease operators chose to ignore the facts because they saw dollar signs in their eyes. In any case, it is up to the lease operator to ask the right questions. If they don't know the questions, then they don't need to be doing one of these leases. Some of the first questions that I would ask is how I would be compensated, break even point and all costs associated with doing the lease? I would expect that if Swift went over the numbers with you that they would have done the same to others. Most large companies have a cookie cutter approach to doing things. They do the same thing with everyone. I am sure there is much that we don't know about the lawsuit. The facts will come out in the court proceedings.