Lawsuit Over Trucker Pay Has Other Fleets Concerned

Some truckload carriers say they are concerned about potential industrywide implications of a class-action lawsuit challenging the way Swift Transportation, one of the nation’s largest truckload carriers, calculates the mileage basis for paying truck drivers.

“We’re concerned that the plaintiffs could get a favorable decision, especially be-cause it’s a class action,” Tommy Hodges, chairman of Titan Transfer Inc., Shelbyville, Tenn., told Transport Topics. “Their lawyer has commented that if they win, they’re going to go after every trucking company that they can.”

Although the courts have not yet addressed the merits of the claims the truck drivers raised in their 2004 lawsuit, the Arizona Supreme Court ruled this month that the lawsuit can progress as a class action.

The class of drivers includes all independent owner-operators and company truck drivers Swift em-ployed or had under contract since 1998, estimated at about 20,000, said the drivers’ attorney, Rob Carey, who is with the Phoenix law office of Hagens Berman.

The drivers have alleged that Swift used “shortest miles” software rather than “actual miles” software as a basis for payment — shortchanging drivers’ pay by an estimated 10%.

“Swift’s practice of paying for materially fewer miles than the miles actually traveled by the driver on the run is uniform and affects all drivers throughout the country,” the plaintiffs asserted in the lawsuit.

Swift has declined to comment on the litigation but has denied the drivers’ allegations in court documents.

Truckload Carriers Association President Christopher Burruss also declined comment on the Swift lawsuit.

However, Lana Batts, managing partner of Transport Capital Partners and a member of the TCA board of directors, said the mileage-basis issue is crucial for carriers’ bottom lines.

Although she declined to comment on the Swift lawsuit specifically, Batts said the way a carrier pays its drivers is very often subject to its negotiating position with its customers, rather than a conscious attempt to short drivers’ pay.

Batts said that when trucks are easy to find, a shipper might have the negotiating power to require that a carrier bill a shipper based on short miles, which guides a truck driver on the most direct route, including through the heart of large urban areas.

By contrast, when capacity is tight, a carrier might be able to turn the tables on the shippers, charging its customers based on practical miles, which typically routes the driver to an interstate loop to avoid city traffic and congestion, Batts said.

As a result, she said, many carriers prefer to bill based on practical miles that can shorten the number of hours it takes a driver to get to a destination and delivery.

Carey said the drivers are not attempting to tell carriers which system to use, but are seeking to make clear the method they use to calculate drivers’ pay.

“I don’t think this is a case of one contract, and I don’t know if it’s an attack on the industry either,” Carey told TT. “What Swift can’t do is say, ‘We’re going to pay you by miles,’ and then pay something that’s 10% less than miles on average. If you know that you’re going to pay 10% less, you need to disclose that.”

“If it’s disclosed and accurate, I don’t think you have a problem,” Carey added.

Hodges said that even when some carriers are pressured to bill a shipper using shortest miles, they may decide in fairness to pay a driver based on practical miles.

“There are some folks out there that still pay shortest miles,” Hodges said. “But the pressure to secure drivers and to keep drivers pretty much drove the market to pay practical miles, which is the closest thing to actual miles.”

Paying drivers based on actual miles can be tricky, Hodges said.

“Some could go out of route and other things,” said Hodges, a former chairman of American Trucking Associations. “So you have to have a benchmark out there, and that benchmark has been practical miles.”

Robert Molinaro, chairman and CEO of Warren Transport Inc., Waterloo, Iowa, agreed that the lawsuit’s outcome could have a significant effect on the industry.

“I think it’s an important issue for carriers,” Molinaro said. “I’m sure that each carrier wants to preserve their particular manner of calculating miles.”

Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association said the lawsuit could have a “pretty big impact” on the industry.

“It shouldn’t, simply because paying drivers on ‘practical’ shouldn’t be something that needs to be legislated,” Spencer told TT. “Drivers shouldn’t be directly negatively impacted by arrangements between carriers and shippers.”