Lawsuit: Cedar Rapids trucking firm keeps money meant for drivers

An Iowa trucking company is facing a potential class-action lawsuit alleging it has schemed to “effectively steal money from their drivers.”

The lawsuit, filed in federal court, alleges that JMS Trucking of Cedar Rapids, and an affiliate, JMS Transportation, signed contracts with several independent drivers or transportation companies, including Brandon Souder, Randy Sanderson, Isaiah Hughes & Sons Trucking, Final Destination Trucking and Conway Transport. Each contract allegedly specifies that the wages paid to the contracted drivers would be based on a “copy of the rated freight bill” that documents the fees collected by JMS, as a broker, from various companies for arranging to transport their products.

Under federal regulations, transportation brokers are obligated to make those billing records and other documents related to freight charges available to contracted drivers.

According to the lawsuit, JMS contracted with the plaintiffs to drive so-called “dedicated routes,” which involve regular, periodic deliveries for particular customers over the same route and on a predictable, prearranged schedule.

Because the jobs involve dedicated routes, the return trips after each delivery is made are considered “empty miles” or “deadhead miles” for which the drivers have no chance of earning any compensation beyond the agreed-to amounts. Those amounts were based on a percentage of JMS’ compensation for each load plus 100 percent of the actual fuel costs of each trip.

The lawsuit alleges that while JMS bills its customers for fuel purchased for both the deliveries and the return trips, it has “furtively adopted an internal policy and practice of falsely representing to their contracted drivers … that they have invoiced and received reimbursement from customers for the loaded miles only.”

As part of this alleged practice, and in an effort to conceal from drivers JMS’ actual collections for each delivery, JMS purposefully omits from its own invoices any line item for the reimbursement of “empty” miles JMS bills to its customers. In doing so, the lawsuit alleges, JMS is able to wrongfully “pocket” about 50 percent of all fuel expenses incurred by the drivers for each load that they carry.

In addition, JMS is alleged to have retaliated against drivers who have tried to exercise their right to examine billing records by giving them less lucrative routes and by lodging retaliatory complaints against them with government regulators.

In seeking class-action status for their lawsuit, the plaintiffs claim more than 40 individual drivers have contracts with JMS, and that JMS operates a fleet of over 175 trucks, the majority of which are owner-operated.

The plaintiffs are suing for fraud, unjust enrichment, breach of contract and violations of the federal Truth in Leasing Act.

JMS Trucking has not yet filed a response to the lawsuit. A company representative said Tuesday that no one there was available to speak to a reporter about the case.

This article first appeared in the Iowa Capital Dispatch.