Supreme Court of California on Nov. 29 denied FedEx Ground Package System’s appeal of the state trial court’s decision finding the company’s drivers to be employees and not independent contractors. In August, the California Court of Appeals also denied the appeal in the landmark Estrada vs. FedEx Ground Package System Inc. case, and determined that the FedEx Ground drivers were entitled to reimbursement for about $6 million in additional expenses, bringing the total damages to about $11 million for 200 drivers.
Indiana contractor Gohmann Asphalt and Construction agreed to pay more than $8.2 million to settle federal and state claims alleging that the company fraudulently swapped samples of asphalt between 1997 and 2006 to inflate the amount paid on road projects by the Federal Highway Administration, Commonwealth of Kentucky, and State of Indiana.
Abdulfatah Osman Farah, a Somali citizen living in Kansas City, Mo., last month became the fifth co-defendant to plead guilty to participating in a conspiracy to provide fraudulent commercial driver’s licenses to large numbers of Somali and Bosnian nationals through testing at the South Central Career Center Truck Driver Training School in West Plains, Mo.
Todd Plumbing of Visalia, Calif., recently paid $5,625 to settle claims by the California Air Resources Board that the company failed to properly inspect its heavy-duty diesel trucks for compliance with the state’s smoke emissions standards.
Q We are a commercial factor that purchased the accounts receivable of small carriers, sending a factoring notice to their customers. One of our assignors who owes us substantial funds has convinced his customer to pay him directly, disregarding our notice. I know that is not legal; can you tell me why not?
AThe role of the factor in the supply chain payment loop frequently is misunderstood. This question provides an opportunity to explain the rights and remedies of the factor (a secured creditor who purchases accounts receivables) and of the payor of freight charges – such as a shipper or broker – who receives the notice of assignment (an account debtor).
Article 9 of the Uniform Commercial Code governs the rights and remedies of secured creditors. Section 9-406 provides that an account debtor may discharge its obligation to the carrier only until it receives a notice of assignment. Once it has been so notified, the shipper or broker as the payor “may not discharge the obligation by paying the assignee.”
