P.A.M. Transport could pay $4.75 million if a federal court approves a settlement in which drivers alleged the company violated minimum wage laws and other charges.
The Arkansas-headquartered dry van TL carrier has agreed to settle the suit, according to court and securities documents filed earlier this month. A federal judge still needs to sign off on the agreement.
The case involves nearly 8,000 drivers for pay violations from January 2020 through July 2022, according to a plaintiff’s brief.
The charges involved the company allegedly not paying workers for all hours worked, including time sleeping as part of 24-hour consecutive periods during multiday drives in which they were required to help protect P.A.M. Transport and customers’ property.
The suit also said workers were illegally charged more than an allowable 10% fee for wage advances, and the company also allegedly made “unlawful deductions” from paychecks, such as deducting $25 per week from drivers in an escrow account until $500 was reached.
P.A.M. Transport has denied the allegations. Regarding drivers’ escrow accounts, P.A.M. Transport acknowledged they existed but rejected the charge that the deducted amounts were improper, the company said in a legal response filed Oct. 18, 2021.
According to the brief, P.A.M. Transport suspended practices during the lawsuit, stopping service fees for wage advances and ending policies to require drivers to fund escrow accounts through wage deductions.
“As part of this Settlement, PAM states it has no intention to reinstituting such policies at any time in the future, and agrees that it will not reinstitute such policies in the next five years,” according to a plaintiff’s brief, filed Aug. 5, 2022.
The business didn’t respond to a message seeking comment.
The settlement would mean a multimillion-dollar hit for the carrier if approved by a judge. In an August securities filing, P.A.M. Transport said existing insurance won't cover the losses in this case.
The yet-to-be-finalized court case also still needs a final settlement hearing, which hasn’t been scheduled.
P.A.M. Transport has faced sizable settlements before. In 2020, a judge approved a $16.5 million settlement between the company and 16,000-plus over-the-road truck drivers. Settlement members who didn’t opt out of the agreement released the company from any claims from Dec. 9, 2013 through Dec. 31, 2019.
P.A.M. Transport denied all the allegations in that complaint, saying it settled to avoid the burden, expense and uncertainty of continuing the litigation.