By Clarissa Kell-Holland
While the warning signs were there that a financial collapse was imminent, former drivers for Arrow Trucking said management always had quick excuses as to why some things just weren’t adding up.
In the weeks leading up to Arrow’s abrupt shutdown just three days before Christmas, drivers reported fuel cards weren’t working at various times; repair work on their trucks either took days to be paid for or wasn’t paid for; and the biggie – calls from home that their paychecks were bouncing.
Then early on Dec. 22, 2009, Arrow drivers received a devastating Qualcomm message instructing them to turn in their trucks to the nearest Freightliner or International dealership. To top it off, their fuel cards were shut off. Many were stranded under a load with few options, and some had even fewer financial resources after they were cut loose.
Many in the trucking community were stunned that a trucking company of Arrow’s size, which reported $218 million in revenue for 2008 and had nearly 1,400 drivers and employees, could crumble without advance warning. But signs were there.
‘Nightmare before Christmas’
One of the hardest lessons to come out of this “Nightmare before Christmas” was that while some suspected or heard rumors that the company’s future was in jeopardy, many former Arrow drivers admitted they weren’t actively looking for a new job or didn’t have a backup plan if something like this happened.
Kip Hough, assistant manager in OOIDA’s Business Services department, said every driver needs to have a “rainy day fund.” He said that, now more than ever, drivers should pay close attention to the red flags and go with their gut instincts when things don’t look right, given the rocky financial state of many companies right now.
“What Arrow essentially did to their drivers was give them the big middle finger here, leaving drivers out in the middle of nowhere with a load, no options, no information, no nothing,” Hough said. “While you want to believe your company wouldn’t do you dirty like this, you still have to protect yourself because no one’s looking out for your best interests except for you.”
However, he said warning bells should have been going off after drivers’ first paychecks bounced.
“The big red flag here was that a decent-sized carrier couldn’t make their payroll,” he said.
Former Arrow driver Denny Carter of O’Brien, FL, found himself stranded under a load in Cheyenne, WY. Looking back now, he wishes he had set up an emergency fund, which he will do so as soon as he can.
Fortunately, Carter said his friends came to his rescue and chipped in money to fly him home after he dropped his truck and load at the Kenworth dealership there.
“Hopefully, this won’t happen again, but if it does, I won’t have to rely on anyone to get me home. Or if it happens to somebody else, I will be able to help them out,” Carter said.
More red flags
Warning bells started going off for one Arrow driver weeks before the company’s chaotic collapse when he was told there were no funds available to pay his $109 repair bill for an axle leak. His truck was in the shop for days until his grandmother decided to pay his bill so he could get back on the road and make money again.
“That set red flags off, and that’s why my truck was only loaded with enough stuff for two bags so I could make a quick exit,” he said.
Looking back now, another red flag for Carter was the fact that Arrow wasn’t hounding him to stop at one of their terminals to pick up the International Fuel Tax Agreement – or IFTA – decals for his truck for 2010.
“I was so focused on getting as many miles as I could, getting paid and making sure my family had a good Christmas. Looking back now, that should have been a red flag,” he said.
“Other companies I worked for were always pushing to make sure you made arrangements to pick up your new IFTA decals and your new proof of insurance card, but we didn’t hear a word from Arrow about this. So, in my mind, they had to know this collapse was coming.”
Bill Pelham of Phenix City, AL, thought he was close to having his 2005 Freightliner paid off. In fact, Pelham had paid in nearly $97,000 toward “truck ownership” through Arrow’s lease-purchase program when the company suddenly shuttered its doors.
After the company’s collapse, Pelham said he immediately called Arrow’s finance company, Daimler Financial, to find out what drivers like him with lease-purchase agreements were supposed to do.
“I was told that they didn’t have any record of me making payments toward this truck and that Arrow basically defaulted on paying on any of their trucks,” Pelham told Land Line.
“So while they said they wanted to work with me, it was definitely going to cost me more than what I showed that I owed on my truck.”
OOIDA Member Robert Anderson of Laredo, TX, is another driver who had a lease-purchase agreement with Arrow. He had paid in more than $50,000 toward ownership of his truck. He told
Land Line he had just renewed his lease agreement with Arrow on Dec. 16, 2009, six days before the company shut down.
“They couldn’t wait to get me in to renew my lease, but they had to know this was coming to an end,” he said.
Anderson said the finance company has been hesitant to share any details surrounding his truck because they had only dealt with Arrow previously and had no record of him having a lease-purchase arrangement with the now defunct company.
“The finance company (Daimler) told me that I had to get with Arrow if I wanted to know the details and get them to open up their books and find out what’s going on and where my money went that they were taking out for payments on my truck,” he said. “I told them, ‘good luck finding them.’ ”
Karen England, who heads OOIDA’s Business Services department, said unfortunately it may not end well for some of these drivers who had lease-purchase agreements with Arrow. Some will walk away, but some are in the process of renegotiating. Of those, some could “end up paying for these trucks twice.”
As of press time, Pelham was waiting to receive his written contract with the final finance terms from Daimler. He said the company quoted him an amount of around $23,000 to keep the truck, which is still way more than what his records show he owes.
“My records show that I only owed $630 before it was mine,” he said.
And to add salt to the drivers’ wounds, the company is completely shuttered, leaving zero access to desperately needed information on their escrow accounts, finance records on their trucks, and much more.
Even worse, Pelham and Anderson are finding out they’re not eligible for unemployment benefits because they are considered independent contractors.
Lynda Baird, who heads Oklahoma’s Rapid Response services, said there are no guarantees these drivers will qualify for unemployment benefits, but she urges them to try for it anyway.
Baird told Land Line that drivers should file an unemployment claim and if that claim comes back as monetarily ineligible, drivers should then file a wage objection. At that time, an auditor would be assigned to the employer to “see if the pay should be classified as wages.”
In her 20 years with the Oklahoma Employment Security Commission, Baird said this is one of the worst cases she has ever seen where employees received no advanced warning.
She confirmed that Arrow is “definitely out of compliance” with the federal Worker Adjustment and Retraining Notification (WARN) Act that requires employers provide their workers with 60-days’ notice of a massive layoff.
“This company offered nothing. They sent nothing and they offered nothing,” Baird said. “This is just a tragic thing; it’s horrible. I just can’t believe that a company would do this to their people. It’s just so sad.”
Hough added these guys should also file an IRS SS-8 Determination of Worker Status form as well.
Some former Arrow drivers have already signed on to a class-action lawsuit that was filed on Monday, Dec. 28, 2009, in U.S. District Court in Tulsa.
Child support nightmare
Besides losing their jobs and having numerous paychecks bounce, some Arrow drivers claimed that while the company deducted child support payments from their checks, the money was not forwarded on to the state agency in charge of disbursing the funds to the children and families.
Jeff Wagner, spokesman for Oklahoma Child Support Services, said his agency has been on high alert since he first heard about the distressing circumstances surrounding the company’s demise.
“As soon as we heard about this I notified our local offices, as well as our surrounding offices that would likely be affected, as well as our customer service call center,” Wagner said.
Unfortunately, he said the practice of an employer withholding child support but not forwarding it on to the state is becoming more common than one might expect.
He told Land Line that affected drivers should call 800-522-2922 if they have any questions or concerns about their child support.
“It’s a shame, really. They thought their children were being taken care of all along and we certainly understand these are special circumstances,” Wagner said.
Recovery efforts continue
Tyree Samson was parked at the Arrow Terminal in Houston, TX, when he received the news the company was shutting his doors and he needed to get off the property immediately.
He and a fellow driver drove to a nearby truck stop in Baytown, TX, to plan their next moves.
“There were repo trucks circling everywhere looking for these trucks, and we were scared if we left them for a minute our trucks and our stuff inside would be gone,” Samson told Land Line.
He said one driver parked his truck long-ways in front of the two Arrow trucks to prohibit a tow truck from being able to hook up.
Some Arrow drivers have reported that their trucks were snatched while they were away, and they weren’t given the opportunity to retrieve their personal items inside.
Gary Purdom, owner of Mo-Kan Recovery Services in Grain Valley, MO, has been in the business for more than 30 years.
He said that while he isn’t privy to all the specifics regarding Arrow’s situation, drivers do have rights to their personal possessions inside.
“There definitely has to be a paper trail on these guys’ trucks and it may take a little time to sort it all out,” Purdom told Land Line. “In our business, once we pick up a vehicle, we immediately call the police in the town where the vehicle was recovered so that’s where these guys need to start looking. The police department should be able to provide them with the name and telephone number of the company that recovered the truck.”
He said recovery companies are required to inventory the contents inside the vehicle and store that property for a certain amount of time that depends on a state’s law where the truck was repossessed.
Purdom said the cost involved in retrieving these items may be the most difficult part of the process for drivers who live in other states and need their items shipped home to them. Some reported that they had heavy tools and other equipment, as well as refrigerators, microwaves and other items.
“While they may locate their stuff, they may not be able to afford to get it,” he said.
As of press time, finance companies for Daimler and Navistar were still in the excruciating process of recovering some of the remaining Arrow trucks, while some with lease-purchase agreements were trying to hang on to their trucks as they negotiated new terms.
Even though the trucking community banded together and brought these drivers home, many drivers admit they learned a valuable lesson from this nightmare.
A heap of trouble is mounting against Arrow and its CEO Doug Pielsticker. The Federal Motor Carrier Safety Administration filed an emergency order on Christmas Eve to the company to make safe arrangements for its trucks and loads. Despite the threat of civil and criminal penalties, the order was ignored.
At least six lawsuits have already been filed against Arrow and Pielsticker. As of early January, the company had yet to file for bankruptcy. LL