CRST must face predatory lease allegations in wage lawsuit

An Iowa federal court ruled that a class of CRST Expedited drivers can proceed with most of its claims in a wage lawsuit based on alleged predatory lease agreements.

On Feb. 4, a federal court in the Northern District of Iowa denied in part and granted in part CRST’s bid to dismiss a class action lawsuit. The decision allows current and former CRST truckers to proceed with the complaint.

According to the third amended complaint, the class of drivers includes those classified as independent contractors and presented with a “Drivers with a Finance Lease and an Independent Contractor Operating Agreement.” The optional lease allowed truckers to lease a truck from CRST Lincoln Sales. However, the independent contractor agreement was mandatory and required drivers to lease their trucks to the trucking company. The complaint notes that this resulted in many drivers leasing a truck from CRST Lincoln and then leasing it back to the company.

Drivers claim that the independent contractor agreement misclassified them as independent contractors as a way for the company to shift operating costs to the driver. Consequently, CRST truckers allegedly earned less than minimum wage if they received any payment at all. The drivers claim they were employees rather than independent contractors.

In the complaint, the truckers claim they had little to no control over how they performed their work. Drivers are expected to follow company policies and procedures, which regulated tasks such as time management, driving, routing receiving loads, delivering loads and safety. Furthermore, the leased on drivers were not allowed to haul loads for another company without permission. That permission was never granted, the lawsuit alleges.

“As one of the nation’s largest trucking companies, CRST’s unlawful practices drive down wages across the trucking industry and undercut fair labor practices throughout the United States,” the lawsuit claims.

The class action lawsuit states six claims against CRST:

• Failure to pay minimum wage under federal law.
• Failure to pay minimum wage under Iowa state law.
• Unjust enrichment under Iowa law.
• Failure to pay all wages due and unlawful deduction in violation of Iowa law.
• Fraud under Iowa law.
• Violation of the Truth in Leasing Act.

CRST motioned to have the fraud, Truth in Leasing violation and unjust enrichment claims dismissed. The company also filed a motion to dismiss CRST International as defendant. Both CRST International and CRST Expedited are defendants in the case.  The federal court denied all of the motions for dismissal except for one part of the fraud claim, leaving remaining fraud claims intact. LL

Other CRST cases:

• CRST reaches $12.5M settlement in trainee wage lawsuit.
  
• Sleeper berth wage lawsuit denied class action status.
  
• CRST poaching lawsuit against TransAm survives.