Wednesday, January 9, 2002

OOIDA continues to go after Burlington: Files suit in bankruptcy court demanding jury trial

Jan. 8, 2002, Grain Valley, MO - The Owner-Operator Independent Drivers Association (OOIDA) has responded to Burlington Motor Carrier's bankruptcy in the face of the legal action brought by OOIDA. On Dec. 11, OOIDA and two of its members, Brian McGrath and Arthur Shaw filed an adversary proceeding in the U.S. Bankruptcy Court (Southern District of Indiana). This complaint was followed by a separate motion filed Dec. 19 to intervene generally in the bankruptcy proceedings of the Daleville, IN, motor carrier.

Burlington had filed for voluntary reorganization under Chapter 11 of the United States Bankruptcy Code on July 9, only months after OOIDA filed a complaint in U.S. District Court in Indiana, claiming violations of the federal truth-in-leasing regulations. With the administrative dismissal of that suit under the bankruptcy protection, OOIDA chose to pursue its original complaints in the bankruptcy court.

OOIDA's lawsuit alleges that despite Burlington's agreement and obligation to charge back premiums for insurance coverage purchased through the company, it was violating federal truth-in-leasing regulations by deducting amounts from owner-operator compensation substantially in excess of the actual premiums.

The complaint also alleges that insurance information was not properly supplied by Burlington when requested, which is also a violation of the leasing regulations.

OOIDA and its members are seeking a court-ordered end to those non-disclosure and overcharge practices plus treble and punitive damages for conversion (including criminal conversion) and fraud. The suit filed in the bankruptcy court is also demanding a jury trial and certification of the class of owner-operators who had similar lease agreements with Burlington.

"We have no intention of walking away from these types of actions simply because a carrier hides behind bankruptcy laws," says OOIDA President Jim Johnston. "These are serious abuses of the federal leasing regulations at the expense of owner-operators and we are determined to pursue companies who engage in these unlawful business practices."

Burlington continues to operate nearly 2,000 power units and 5,000 trailers throughout North America. It has an extensive presence in Mexico with offices in Monterrey and Mexico City supported by a full operations facility in Laredo, TX. In addition to its longhaul fleet, Burlington also provides regional services through fleets based in Atlanta and Chicago. The company was ranked 18 in revenues among the top 20 largest truckload van carriers in the United States in 2000.

On Dec. 6, Thomas F. Grojean, Sr. chairman and CEO, and Terry A. Wallace, president and COO of Burlington announced that senior executives of the company intended to purchase certain assets and substantially all of Burlington's business.

"We had always planned to proceed with our complaint, despite Burlington's bankruptcy," said Johnston, "but when we became aware that Tom Grojean and his associates were going to try to buy up Burlington assets and business, we immediately filed the adversary proceeding and the motion to intervene. We want to make the seriousness of our intentions very clear."

The Grojean name is well-known in the trucking industry due to the Grojean family's numerous and diverse involvements. Grojean operates several motor carrier companies, doing business as Grojean Transportation Inc., headquartered in West St. Paul, MN. The group includes Greenfield Transport, TMG Express, Hirschbach Motor Lines, Van-Pak and Schanno. Burlington is not a part of that group.

Johnston went on to add, "Based on the allegations in the Burlington case and Grojean's business and family connections to these companies, it might be prudent for owner-operators participating in any of these companies' sponsored insurance programs to request insurance documentation supporting the premiums charged for any coverage purchased."

If you are a current or former Burlington owner-operator, or you have questions or information about this case, call OOIDA's business services department at (800) 444-5791.

OOIDA files class action against Heartland Express: Alleges violation of federal leasing regulations

Jan. 8, 2002, Grain Valley, MO - The Owner-Operator Independent Drivers Association announces that it has again filed a class action against a major U.S. motor carrier for alleged violations of the federal leasing regulations.

OOIDA, along with two of its owner-operator members, filed the class action against Heartland Express Inc. of Iowa City, IA, in the U.S. District Court for the Southern District of Iowa (in Davenport). The complaint contends Heartland Express has engaged in a pattern and practice of conduct violating its obligations to its leased owner-operators.

At issue are allegations that owner-operators leased to Heartland were forced to purchase insurance from the company, the failure of the carrier to provide insurance documents upon request and the excessive charge-backs to owner-operators for insurance premiums. The complaint also alleges excessive charge-backs to the owner-operators for fuel purchased through the carrier's purchasing program with Comdata Inc. All of the allegations represent violations of the federal truth-in-leasing regulations.

Heartland Express joins a growing list of motor carriers targeted in recent years by OOIDA in its efforts to promote compliance with federal leasing regulations. Other carriers currently defending themselves against legal actions by the nation's largest organization of professional truckers include Burlington Motor Carriers, Mayflower Transit, Ledar Transport, New Prime Inc, Arctic Express and Gilbert Express.

"OOIDA will continue to set its sights on unscrupulous carriers who bolster their profitability at the expense of their leased owner-operators", said OOIDA President Jim Johnston. "We are determined to eliminate the abuses of the federal leasing regulations that result in substantial financial losses to owner-operators and their businesses."

In addition to the specific counts mentioned in the complaint, OOIDA is requesting that the suit against Heartland Express be certified as a class action to include other owner-operators who have experienced similar losses through their leases with this carrier.

RadioShack apologizes to truckers

RadioShack has apologized for an ad that has drawn the ire of many truckers, some of which are among the company's best customers.

The electronics chain mailed a sales catalog around the first of the year with an ad that reads: "You're on your wireless, when suddenly an 18-wheeler is in your lane, cutting you off! Good thing you had both hands on the wheel, thanks to the hands-free wireless headset from RadioShack."

After receiving numerous complaints from trucking professionals, a RadioShack customer service spokesperson issued an apology Jan. 2, which states in part: "We sincerely apologize to members of the trucking profession." The ad "was certainly not intended to offend anyone...In the future we commit to showing more sensitivity."

The statement continues: "Trucking professionals provide a vital role in public safety on today's roads as they are usually first to report traffic accidents...We recognize the vital role the trucking industry plays in the economy of our country and appreciate the role trucking professionals play in helping keep our nation's roads safer."

OOIDA member is a buddy to students

Owner-operator and OOIDA member Kevin Bradford may not look like Santa Claus, but he enjoys playing the role to his third grade Trucker Buddy class. Kevin insists that he is the one who has the most fun in playing Santa Claus for the class.

Each child in Heather Garland's Simpsonville, KY, Elementary school was given one gift - donated by The Siefkes Group of Issaquah.

"I love going to speak with the kids," says Kevin. "It's so easy to do and the rewards are great for both me and the kids. Watching their eyes light up when you tell them about trucking and being out on the road is really special."

When Kevin, of North Easton, MA, isn't corresponding with the class or moving families around the country as a household goods mover, he shows his Kenworth at truck shows. The class was able to visit Kevin at last year's Mid-America Truck Show in Louisville. While at the show, they were treated to the Alabama concert, compliments of Kenworth, and watched and cheered as Kevin won a second place trophy in a combo division in his first ever event.

"It was a lot of fun having some of the kids come down to visit and going to the concert," says Kevin. "We're planning on having them come down again this year."

Trucker Buddy is a non profit organization supported solely by donations from sponsors, such as Platinum level DaimlerChrysler Services and Gold Level donors; OOIDA, Caterpillar, Delphi, Midnight Cowboy Radio Network, in addition to Silver Level donors: ArvinMeritor, AT&T, Kenworth, TruckDriver.com, TCA and Wal-mart. For more information about the program, visit http://www.truckerbuddy.org or call 1-800-MY BUDDY (692-8339).

Head of transportation security appointed

President George W. Bush has appointed John Magaw as Under Secretary for Transportation Security. Magaw will serve as the head of the newly authorized Transportation Security Administration, which is responsible for protecting airports, highways, trains, buses, ports and waterways nationwide.

Transportation Secretary Norm Mineta hailed the decision. "John Magaw is a superb appointment," Mineta said. "He brings decades of wisdom, experience and leadership to our new Transportation Security Administration."

Magaw, a native of Columbus, OH, was most recently the Acting Executive Director of the Office of National Preparedness within the Federal Emergency Management Agency. He is a former director of the Bureau of Alcohol, Tobacco and Firearms (ATF) and the U.S. Secret Service.