SPECIAL REPORT: Owner-operators will get their day in court, says Utah judge

| 1/16/2004

Jan. 16, 2004, Salt Lake City – On Jan. 15, the U.S. District Court for the District of Utah agreed to hear a suit filed against C.R. England by the Owner-Operator Independent Drivers Association on behalf of five OOIDA members. The court rejected the Salt Lake City-based motor carrier’s bid to force owner-operators to arbitrate their claims individually.

Judge Ted Stewart held that owner-operators are exempt from compulsory arbitration under the Federal Arbitration Act. The court found that the cost of arbitration is too high in relation to the size of the typical owner-operator claims, preventing it from providing a viable forum for dispute resolution. Judge Stewart took particular note of the fact that virtually no owner-operator claims had ever been resolved through arbitration and that C.R. England had never filed an arbitration claim itself, preferring to refer claims against some 2,600 owner-operators to collection agencies. Judge Stewart also denied C.R. England’s motion to dismiss the case and ruled in favor of OOIDA’s position that the statute of limitations was four years rather than only two years as contended by C.R. England.

During argument on the issue of the drivers’ ability to negotiate the terms of C.R. England’s lease agreements and therefore influence the inclusion of arbitration clauses, OOIDA attorneys cited the example of C.R. England’s latest revised lease agreement. Shortly after the filing of this case, England distributed to all leased operators a revised lease agreement. The attorneys informed the court of contacts from drivers stating they were told that if they did not sign the new agreement, they would be terminated. In defense, England attorneys told the court the company had made every attempt to get them to sign and indicated it only had to fire less than 10 of the drivers. The court was not persuaded this was a reasonable form of negotiation.

"Judge Stewart's ruling is an important victory for OOIDA and all owner-operators," said OOIDA President Jim Johnston, who attended the hearing. "It will serve as a giant step forward establishing an important precedent in other pending cases as well as clearing the way for a hearing on the merits of owner-operator claims against C.R. England. Most importantly, the court in making its ruling recognized the impracticality of drivers' vindicating their federally protected rights through individual arbitration actions. More and more carriers are beginning to add these provisions as a means of avoiding lawsuits challenging what we believe to be blatant violations of the truth-in-leasing regulations."