Prime Inc. must pay $100,110 because it failed to respond in a timely matter to a notice of claim concerning alleged false logs, Federal Motor Carrier Safety Administration Assistant Administrator John Hill ruled. The company, which is seeking reconsideration, said its overworked mail room staff had misdirected the notice of claim. For more information, visit this site and search Docket No. 20650.

Federal Trade Commission upheld a July 2004 initial decision by an administrative law judge that the Kentucky Households Goods Carriers Association, Inc. engaged in illegal horizontal price-fixing in violation of the FTC Act. The commission also upheld the initial ruling that the state action doctrine does not immunize the association’s collective rate-making from prosecution under federal antitrust laws. For more information, visit this site.

Action Carrier Inc. and its president, Michael L. Walsh, pled guilty in U.S. District Court in Sioux Falls, S.D. – the corporation to a felony charge of causing a truck driver to falsify logbook entries in order to conceal violations of Federal Motor Carrier Safety Administration hours-of-service regulations, and Walsh to a misdemeanor charge of obstruction of justice for refusing to allow an FMCSA inspector possession of a file during a compliance review inspection. Sentencing is scheduled for Sept. 6.

Q As a carrier, we frequently encounter covenants not to back-solicit in broker-prepared contracts. Are such agreements enforceable?

A Such covenants generally are enforceable and interpreted in accordance with their terms. Most brokers take the position they have a vested interest in customer development and do not want to see the carriers they retain merely use their services to find freight in lieu of developing a sales department. In the absence of such provisions, brokers fear that carriers will circumvent their services freely, attempting to procure freight from their customers on a direct basis with the incentive of saving the shipper the broker’s commission.

Flagrant back solicitation is not a practice that can be condoned ethically, yet it is important for a carrier to read and understand the scope and effect of a back-solicitation provision before agreeing to it. A proper back-solicitation agreement should be limited in duration, scope and amount and should not preclude a carrier from responding to a future unsolicited request for service if initiated by the broker’s customer.

Typically, well-written back-solicitation provisions are limited to prohibit a carrier from contacting the broker’s customer for six months or a year after the last shipment moved or the broker-carrier contract was terminated. Typically, the carrier is required to pay the broker a percentage of the revenue derived from violating the covenant over a fixed period of time. Important questions are “To what traffic does the covenant apply?” and “What is meant by the term ‘back solicitation’?”