Mega carriers defend themselves in no-poach conspiracy theory lawsuit
June 19, 2020
Some of the nation’s largest motor carriers are defending themselves in a lawsuit accusing them of conspiring to a mutual agreement to not poach each other’s drivers, effectively eliminating competition and advancement opportunities for drivers.
On June 4, attorneys for Schneider National Carriers filed a memorandum in support of all defendants’ motion to dismiss antitrust claims in a California federal class action lawsuit. Other carriers named as defendants include CRST, C.R. England, Western Express, Southern Refrigerated Transport, Covenant Transport and Stevens Transport.
Plaintiffs are alleging a no-poach conspiracy among the mega carriers. The carriers are being accused of agreeing to not hire drivers from one of the other carriers. As a result, opportunities for advancement and higher pay through another company are greatly diminished. Consequently, the carriers’ alleged antitrust practice drives wages down, plaintiffs state.
Drivers for various large carriers originally filed the class action lawsuit in June 2017. According to the fourth amended complaint filed on April 15, the named trucking companies conspired to restrain competition among themselves in order to suppress compensation of their own workers. Those actions “deprived thousands of their workers of better compensation and deny them opportunities to advance their careers at other companies,” the complaint states.
Plaintiffs claim the carriers entered into a no-poaching conspiracy by agreeing not to hire employees who remain under contract with another trucking company. In this case, “under contract” refers to those who attended one of the company’s driver training schools or offered reimbursement for driver training courses. Essentially, a driver is considered under contract if he or she still owes tuition, even if the driver quits or is fired before paying it off.
CRST maintains a list called the “Term Student Report,” according to the complaint. Updated daily, the list identifies all drivers who remain under contract. CRST and the other named trucking companies allegedly use this list to deprive those drivers of the ability to work elsewhere.
In addition to the list, the carriers’ contracts contain a provision prohibiting drivers from working with other companies until tuition is paid in full. According to court documents, CRST’s contract states “unless and until student has repaid all amounts owed under this agreement, student will neither seek nor accept any work, as an employee, independent contractor or otherwise, from any motor carrier other than (this trucking company).”
When considering hiring new drivers, defendants communicate with each other to determine whether an applicant is under contract with any trucking company. If they are, companies refuse to hire the driver, despite whether the person is unemployed and otherwise meets the company’s hiring criteria. Plaintiffs state that this practice violates state and federal antitrust laws.
Adding to the conspiracy, plaintiffs claim that the carriers will not release trucking school diplomas and certification of completion to prospective employers until the tuition is fully paid.
The Department of Justice’s Antitrust Division issued its “Antitrust Guidance for Human Resource Professionals” in October 2016. In it, the DOJ warns it ““will criminally investigate allegations that employers have agreed among themselves on employee compensation or not to solicit or hire each others’ employees.” It also states that “an agreement among competing employers to limit or fix the terms of employment for potential hires may violate the antitrust laws if the agreement constrains individual firm decision-making with regard to wages, salaries, or benefits; terms of employment; or even job opportunities.”
Motor carriers’ defense
On June 4, the named trucking companies countered the above claims. Essentially, they argue two points: 1) The reasoning to not hire other companies’ drivers is less sinister than alleged and 2) the conspiracy theory is simply implausible.
In their defense, the motor carries state the reason why they do not hire truckers under contract from another is because they are under contract. According to the motion to dismiss, case law prohibits interference with a valid contract for one’s own economic benefit.
“A motor carrier cannot interfere with another carrier’s driver contracts, those courts have made clear, without potentially exposing itself to significant liability,” the trucking companies state. “Simply put, that is why each of the defendants independently decided not to hire each other’s ‘under contract’ drivers. Plaintiffs’ allegations to the contrary are implausible.”
In fact, Schneider’s memorandum in support to dismiss points to a lawsuit between Swift Transportation and CRST.
Last year, Swift was ordered to pay more than $15 million for poaching newly trained drivers from CRST.
The trucking companies note that motor carriers “routinely sue one another (or threaten to) for hiring away ‘under contract’ drivers.”
Addressing the plausibility of the conspiracy theory, the trucking companies say there’s nothing in the latest complaint that proves a conspiracy.
“(Plaintiffs)insist instead that defendants’ actions are not the result of independent efforts to minimize legal risk, but rather the coordinated outcome of a vast nationwide conspiracy among eight motor carriers to restrict driver mobility and depress first-year wages in the trucking industry,” the carriers argue. “To withstand dismissal, plaintiffs must offer something that suggests their sweeping conspiracy theory is the more plausible explanation. The fourth amended complaint offers nothing remotely close. Instead, its bid for nationwide relief is propped up only by plaintiffs’ own say-so.”
As of publication, the court had not ruled on the motion to dismiss.