A group of six family-owner trucking companies filed a lawsuit against two of America’s largest freight brokers in Texas federal court late last week.
The six companies filed a Racketeer Influenced and Corrupt Organizations Act lawsuit on Wednesday, September 23rd. The suit alleges that C.H. Robinson and Total Quality Logistics brokered loads to illegal chameleon carriers, hiring them at low rates that compliant trucking companies cannot accept.
Trucking companies Stevens Trucking Co; Western Flyer Express LLC; D & M Carriers LLC, or Freymiller Trucking; IWX Motor Freight LLC, Christenson Transportation Inc, and E.O.S. Inc filed the suit. These companies allege that the brokers named in the suit have diverted loads to “fly-by-night companies registered under fake addresses who are severely underinsured; recruit and exploit foreign drivers through forced labor; disregard safety regulations; falsify logbooks; and cause a disproportionately high number of crashes and fatalities on U.S. roads and highways.”
The suit alleges that hiring these illegal carriers allows the brokers to operate more cheaply, while giving illegal carriers access to contracts that they should be rejected from due to their poor safety records. It is also alleged that the carriers are aware that they are contacting chameleon companies – companies that simply open up under a new name after they are shut down for poor safety records.
The suit claims that the “defendants’ relationship with illegal carriers allows them to maintain a safe and compliant façade.”
The complaint states that lawful trucking companies are experiencing massive losses due to these practices, and many are being forced to close. The plaintiffs also allege that highways across the nation are now more dangerous than ever, due in part to the hiring of these illegal carriers.
“TQL and C.H. Robinson set the price and illegal carriers accept these bargain-basement bids often with no questions asked,” the complaint said.
“Defendants’ pre-made bids are too low to be profitable for legally operating drivers. They instead target foreign drivers working under illegal carriers who readily accept them,” the trucking plaintiffs alleged. “This drives profit margins down for the entire market.”
They have knowingly enabled and profited from forced labor, solicited an influx of unqualified foreign truck drivers onto our roads, and driven hard-working American trucking companies out of business. Our goal is to hold these defendants accountable for their actions and help restore more safety and reliability to the industry,” said Trey Duck, attorney for the family-owned trucking companies.
C.H. Robinson says it “strongly rejects” the allegations.
“We reject the allegations in this civil lawsuit, its false characterization of C.H. Robinson and our business practices, and its fundamental inaccuracies about how the freight market actually works,” Chief Legal Officer for C.H. Robinson, Dorothy Capers, wrote in a statement emailed to CDLLife.
“We’ve worked hard to build a network of carriers, from the largest to the smallest, including family-run operations who’ve been hauling freight for our customers for decades and grown their businesses across generations. All the carriers we work with are authorized by the federal government, plus meet additional safety standards and higher levels of insurance than legally required. Running a responsible company is foundational to who we are, and serving our two-sided marketplace of shippers and carriers well is why we’ve been successful for 120 years.
“This lawsuit is wrong about some of the most basic elements of the industry. No freight broker sets rates. The marketplace does. When demand for carriers is high and supply is low, carriers command higher rates. When demand is low and the supply of carriers is high, shippers command lower rates... The choice of a carrier for any shipment rides on a multitude of factors. Our process takes into account carrier proximity, size, equipment, certifications, and customer requirements ranging from sustainability to service levels.
“We look forward to defending ourselves vigorously and pursuing counterclaims supported by real facts and the law.”
