A class-action lawsuit is accusing FR8 Solutions of grossly underpaying independent contractor truckers by misrepresenting the rate it received from third-party brokers.
The lawsuit was filed in a federal Illinois court by Edin Husidic and nearly two dozen other independent contractor truck drivers who hauled loads for FR8 Solutions. Truckers claim that the company, CEO Alen Kajdic and an accountant, Azra Begovic, failed to disclose true rates in transactions with third-party brokers.
From January 2017 to August 2023, truckers entered into contracts with FR8 Solutions that paid them 88% of the linehaul rate. Rather than receiving the full 88% of the rate, drivers received altered statements and dispatch instructions reflecting a rate substantially lower than what the company agreed to with various brokers, including Ascent On-Demand, Active On-Demand and Landstar.
Examples of FR8 Solutions underpaying truckers range from as little as $100 to thousands of dollars. In one case, Husidic was dispatched to deliver a load from Wood Dale, Ill., to Gaffney, S.C. The app drivers use indicated the load was contracted at $2,400. However, the company received $2,500.
In a more egregious incident, one of the other plaintiffs was paid 88% of $8,000 for a load from Del Rio, Texas, to Kansas City, Kan. But FR8 Solutions actually received $15,000 for the load, underpaying the driver by thousands of dollars.
“In the transportation industry, paying a truck driver based on a ‘percentage of the linehaul rate’ means paying a driver a percentage of the total price the carrier’s third-party broker customers pay the carrier to transport the load,” the lawsuit states.
Truck drivers did not discover the underpayments until June 2023, when a co-operator within FR8 Solutions revealed the actual linehaul rates the company received. Once that information was revealed, drivers’ contracts were terminated. The lawsuit also alleges that truckers were locked out of their app accounts to prevent them from gathering evidence corroborating claims of underpayments.
Husidic also leased a truck from FR8 Solutions. After discovering underreporting of load values, Kajdic is accused of wrongfully taking possession of the truck in breach of the lease agreement. The truck was taken from Illinois and sent to Florida, where Kajdic posted a picture of the truck on Facebook to taunt Husidic, the lawsuit alleges.
Threats of violence
The lawsuit also claims that Kajdic used threats of violence to discourage truck drivers from taking legal action or reporting FR8 Solutions to the U.S. Department of Transportation.
Court documents show screenshots of text messages between Kajdic and one of the plaintiffs. In one exchange, Kajdic suggests that if Husidic costs him business with one of the brokers, then “he will not be alive.” Other messages include:
- A threat to find someone to break every bone in (Husidic’s) body
- “Leave us the f**k alone or I will f**king personally hit him where it hurts most.”
- “Too bad he doesn’t have kids, but he has a wife.”
- “A hundred thousand in Laredo, someone’s head goes off, so let him play with FR8.”
- “Just warning … Tell them to stop pushing … or it won’t be good.”
- “Someone will end up locked up or … dead.”
The lawsuit claims FR8 Solutions, Kajdic and Begovic violated the Racketeer Influenced and Corrupt Organizations Act and one count of breach of contract.
FR8 Solutions could not be reached for comment.
Broker transparency
Allegations of FR8 Solutions underpaying drivers by thousands of dollars a load highlights issues with broker transparency the trucking industry has been trying to address.
For years, owner-operators have been urging the Federal Motor Carrier Safety Administration to enforce and improve on current broker regulations. Existing regulations require carriers to provide information about their transactions with brokers. However, brokers have a history of failing to disclose transaction information.
CFR 371.3 states that brokers must keep records of transactions with motor carriers. One subsection of that regulation gives each party to the transaction, including the carriers, the right to review the record. This provision allows truckers to see what their cut is of the full rate that the shipper paid the broker. However, the Transportation Intermediaries Association, which represents brokers, suggested to its members in a letter that the regulation does not necessarily apply to owner-operators.
Another tactic used by brokers is to make records available only at its physical office during normal business hours. Essentially, that makes access to information virtually impossible for most owner-operators and small carriers.
In May 2020, the Owner-Operator Independent Drivers Association petitioned FMCSA to begin the rulemaking process for more transparency, including by:
- Requiring brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed
- Explicitly prohibiting brokers from including any provision that requires carriers to waive their rights to access transaction records
That petition was granted in March 2023. FMCSA is expected to publish a broker transparency notice of proposed rulemaking on Oct. 31.
To learn more about broker issues plaguing the industry and inform your lawmakers about the issues, go to FightingForTruckers.com. LL
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