Even after court victory, owner-operators out tens of thousands

By Charlie Morasch, Land Line staff writer | 8/2/2011

Roy Donovan doesn’t look like a victim of the road.

Looking fit and wearing western wear, Donovan wore a black snap-down shirt with gold pinstripes that might have once belonged to Johnny Cash. His feathered gray hair and groomed sideburns complement his 40 years in trucking.

Photo by Nikohle Ellis

Minnie and Roy Donovan

Minnie Donovan, Roy’s wife, has more than 30 years of truck driving experience herself, and exudes the confidence and independence of someone who has heard it all before.

Life members of OOIDA, the Donovans live in Hannibal, MO – boyhood home of legendary humorist Mark Twain. Along with Danny Donovan, Roy’s brother, the Donovan family is owed nearly $20,000 after being hoodwinked into restrictive lease deals with Owner Operator Union, a now defunct Illinois trucking company.

Their story may sound like a Twain essay, with details of hucksterism wrapped with attorneys, promises and the pratfalls of American capitalism. Unfortunately for Roy and Minnie, it’s all too real.

The Donovans are among nearly 20 known truckers who signed on with Owner Operator Union, yet received no pay. The scam highlights the ease with which overnight trucking firms can obtain authority from FMCSA, broker loads, and make money off the backs of unsuspecting drivers before closing up shop and paying no one.

The Donovans lost more than $11,000, and even after winning a judgment in court this spring, they’re not likely to ever see that money again. According to an OOIDA investigation, two company operators from Owner Operator Union remain in the U.S., including one who had recently still been working in trucking.

Despite the slam-dunk civil suit, and their subsequent victory this spring in Cook County (IL) Circuit Court, the Donovans and other plaintiffs haven’t seen a dime, and may never do so.

An open and shut trucking shop
Roy Donovan still remembers the classified ad for “Owner Operators Union Inc.”

The company was leasing on experienced, qualified drivers to haul good loads for good money.

Visiting their headquarters in suburban Chicago, Donovan was so impressed he talked up the company to his brother, Danny.

The Donovans signed on with Owner Operator Union in October 2009. A man named Michael Bogan told them he didn’t own the company, but was operating it, along with out-of-town company president Robert Iozia.

The company gave its drivers a quick tour of the suburban Chicago office, including a dispatch room with one male and two females working, before urging them to sign the paperwork quickly.

A load was waiting.

In what seemed like only minutes, Owner Operator Union had sent the Donovans on their way, before Roy’s drug test had even produced results.

“We didn’t realize how illegal that was until later, but that’s highly illegal,” Roy told Land Line Magazine.

Before long, both Donovan brothers were getting antsy about their lack of a paycheck, and after questions, company operator Michael Bogan told them they’d been assessed fines that negated their paychecks.

The Donovans and the other drivers quickly realized that Owner Operators Union used those company-imposed fines as a way of avoiding paying a single dollar to its drivers.

The deductions had been spelled out in their lease agreement.

Drivers who signed a lease, likely skimmed past page 12 – which lists expensive fines created and defined by the company.

Placed out of service? “$1,000 and termination.”

Unauthorized load or movement? “$5,000 each violation, no exceptions.”

Turn down a load of $1.50 per mile or more? $500 and a verbal warning.

After several arguments, including one face-to-face meeting between Danny Donovan and Michael Bogan, Owner Operator Union stopped communicating with the Donovans altogether.

Danny Donovan, in particular, wrote some nasty emails in the meantime, during a period of time in which the $7,000 owed to him cost him a motorcycle and nearly forced his home into foreclosure.

In their last conversations, Danny Donovan and Roy Donovan said Bogan told each of them to “go f%&# yourself.”

In a final settlement sheets that negated all of Danny and Roy’s earnings, Bogan wrote a personalized, albeit short note on the outside of each separate envelope mailed to both of them. “G.F.Y.S.”

He later told a representative of the FMCSA regional office in Springfield, IL, that the initials meant “God forgives your sins.”

Is a win a win?
Matt Barrette is an attorney who specializes in transportation law out of his Oakbrook, IL, office. Working with OOIDA’s Dale Watkins, Barrette identified several owner operators who had been bilked by Bogan, Iozia and Owner Operator Union.

He filed a civil suit in 2010, and won summary judgment for the Donovans and other plaintiffs this spring totaling more than $50,000.

Barrette acknowledged that the registration process with the Federal Motor Carrier Safety Administration leaves many drivers vulnerable to fly-by-night companies.

Still, he said, Owner Operator Union seemed especially adept at knowing the law and appearing legitimate to experienced owner operators.

“They did a very good job of hiding what happened to the money,” he said. “They literally were there one day and gone the next.”

Barrette saw another red flag when he realized Owner Operator Union was asking its drivers to pay a $200 dispatch fee each week, yet promised 100 percent of load revenues to the driver.

“Usually it’s 85-15 or something like that,” Barrette said. “That was a very different arrangement.

“It’s unfortunate that there are companies out there that took advantage of drivers like this,” Barrette said. “They open up, bring guys on and just not pay them, then close up shop when the heat starts coming.”

The federal regulations are supposed to limit the ability of dishonest companies from preying on owner operators, Barrette said.

“The problem is, if someone as in this case, if they don’t care all they have to do is have a non-asset based company made up of owner operators,” he said. “If the company can shut down and reopen somewhere else – that makes owner operators susceptible to these types of operations. I don’t know of any amount of government regulation that is going to stop people from doing what these people did.”

Barrette said he doesn’t believe the trucking families will ever see their checks from Owner Operator Union or the defunct companies’ owners.

“Tracking the owners down and piercing through the corporate veil to get to the owners – it would cost more to do that in legal fees… and it would be very difficult to find the assets once we did it,” Barrette said. “They did a very good job of hiding what happened to the money.”

Neither Bogan nor Iozia returned phone messages left by Land Line.

A woman answered the phone at one Midwest motor carrier where Bogan had recently worked as a safety director.

After a deep sigh, she said “he no longer works here.”

Red flags
Despite high pressure to sign leases, owner operators should take all the time they need to read any lease or contract they sign with a motor carriers, said OOIDA’s Dale Watkins, who works at the Association’s Business Assistance department.

OOIDA members can also call the association at 1-800-444-5791 for assistance in reviewing the lease before signing, he said.

“We’d be glad to look over any lease,” said Watkins.

When Roy and Minnie stopped at OOIDA headquarters in mid-July, their friendly smiles stopped when talking about their battle with Bogan, Iozia, and Owner Operator Union.

Minnie said Roy never should have signed the contract, and Roy nodded in agreement.

The Donovans know other veteran owner-operators will quickly point out the same, but they’re willing to face the finger-pointing if it means another trucking family might be spared.

“I hope it helps other truckers out,” he said.

Then Minnie and Roy hit the road.

A load was waiting.

Copyright © OOIDA