PAM Transport reaches multimillion dollar settlement in wage lawsuit

Thousands of drivers have reached a multimillion dollar settlement with PAM Transport in a wage lawsuit.

According to court documents filed on Aug. 5, a class of about 8,000 PAM Transport drivers have reached a settlement deal with the Tontitown, Ark.-based company. If approved by the court, those drivers will be entitled to a portion of the $4.75 million settlement.

In addition to the monetary settlement, PAM Transport “has agreed that it will modify certain payroll and employee advance policies such that employees will no longer be subject to deductions for escrow accounts, and will no longer be charged any amounts for requesting an advance on wages,” according to a plaintiffs brief.

The lawsuit alleged that PAM Transport:

• Failed to pay its over-the-road employee drivers at least the minimum wage for all hours worked under both state and federal law.
• Made unlawful deductions from drivers’ wages through the use of an “escrow” account.
• Charged “usurious” interest rates on employee advances and recovered such amounts in violation of state and federal law.

Vazquez v. PAM Transport

Former driver Lee Vazquez filed the complaint one year prior to the settlement proposal in August 2021.

Similar to other wage lawsuits, Vazquez claimed that all time spent over the road is compensable due to the strict control PAM Transport has over drivers. Specifically, the complaint claims the company requires drivers “to remain over-the-road in or in the general proximity of their assigned truck for more than 24 consecutive hours during multiday and multiweek tours of duty.”

In addition to unpaid work-related activities, like fueling and routine maintenance, Vazquez claimed that activities such as sleeping were compensable due to the fact that PAM Transport required them to stay with the truck to protect customers’ property. Drivers were never paid for that time.

Accounting for that unpaid time, which is at least 16 hours a day on the road, drivers claim they were paid below minimum wage.

Missing wages also applied to any paychecks received upon termination that do not reflect the claimed compensable work hours.

Vazquez also alleged unlawful deductions.

The complaint claimed PAM Transport deducted $25 a week until $500 accrues in an escrow account. Additionally, drivers who attended its CDL school were charged $45 per week to repay loans.

Drivers also had the opportunity to receive an advance on paychecks. However, that came in the form of a loan that charged drivers more than 10% per annum. According to Arkansas state law, an employer cannot discount wages for pay advances at a rate of more than 10% per annum from the date of payment to the regular payday. Since those advances go through electronic payment processor Comdata, Vazquez also claimed violations of the Electronic Funds Transfer Act.

Additionally, the federal RICO Act makes it illegal for a company to receive income through the collection of unlawful debt when engaging in interstate commerce. Consequently, the lawsuit claimed RICO violations due to the “usurious advance charges.”

The lawsuit is similar to another that was settled for $16.5 million in July 2020. Details about that case can be found here. LL