A sick industry on display
Want to see a sick industry on display? Me neither.
Even so, check out the court fight between carriers CRST and TransAm Trucking and its larger context. In news stories, court filings, and judicial decisions, thousands of drivers amount to something between indentured servants and lab rats. Can there be indentured lab rats?
The 24th largest carrier in the country with more than 5,000 drivers, CRST did $1.6 billion in business during 2019. CRST offers company-sponsored CDL training. They do some of that training themselves near their headquarters in Cedar Rapids, Iowa. They also “contract out to multiple independent CDL schools” in Dallas; Riverside, Calif.; and Jacksonville, Fla., the CRST website says.
Altogether, CRST turns out 3,500 new drivers a year, according to Transport Topics. In 2016, CRST sued Olathe, Kan.-based TransAm for hiring away some of those drivers. They would soon win a $15-million judgment against Swift-Knight in a similar case. But the TransAm lawsuit was thrown out in a summary judgment. CRST appealed.
Now, like a crusty zombie, the TransAm case has arisen from the dead, offering yet another chance to wonder at truckload’s insatiable driver-eating machine.
The drivers in CRST vs. TransAm were – arguably, it turns out – under contract to CRST for the cost of their training. CRST claims that cost is $6,500. Drivers can pay by working for CRST for at least 10 months, but if they quit before then they still owe the money and supposedly remain under contract. Here’s the contract kicker: Until the driver has paid the full amount, he or she can “neither seek nor accept any work, as an employee, independent contractor or otherwise, from any motor carrier.”
That’s right. Given the scant employment opportunities available, drivers are expected to pay back the money without the ability to earn it.
And just to put a bow on the unsavory package, CRST allegedly threatened up to 18% interest on unpaid debt.
So, if a driver quits CRST, why go with a carrier like TransAm? Are they sweethearts who shower their drivers with love? I doubt it, but like many carriers, TransAm does offer a sign-on bonus. In this case it’s $2,500. At least it’s something to help pay back CRST.
Mercifully, in June, a U.S. District Court issued an injunction barring CRST from collecting any more than the actual cost of training. That lawsuit, not connected to the TransAm fight, claims CRST pays the schools it contracts with no more than $2,500. That’s $4,000 less than CRST has been collecting from trainees. The injunction is temporary pending further motions and trial.
A number of big carriers – including CRST – also stand accused of an anti-trust conspiracy. They allegedly agreed not to hire drivers who owe money for training and are thus still under contract. The carriers deny it, of course, and you do have to wonder why parties to such a conspiracy would be suing each other.
CRST isn’t the only carrier sucking in wannabe drivers like crumbs into a Dustbuster. Swift, Prime, and C.R. England are among others that offer training under employment contracts. And while all training programs feed truckload’s greedy appetite for drivers, they can differ in many ways. Some are worse – or better – than others.
Oh, by the way, CRST has told the court it will no longer threaten 18% interest in its collection letters.
Isn’t that nice of them? LL