Settlement reached in Pilot lawsuits, CEO says checks have been sent

By James Jaillet on

pilot 1.35.35 PMPilot Flying J has agreed to a settlement for the roughly 20 class-action lawsuits brought against it since allegations surfaced in April that the company had been defrauding carriers out of millions of dollars in owed fuel rebates.

According to court documents Pilot has agreed to pay all of the amounts owed to the lawsuits’ plaintiffs plus 6 percent interest on the principal owed.

Moreover, Pilot is responsible for paying administrative and accounting fees, attorney’s fees and court costs. Pilot has also agreed to be “permanently enjoined” from withholding rebates deceptively from customers.

Pilot Flying J owner and CEO Jimmy Haslam wrote an open letter to customers last week saying the truck stop chain has already performed internal audits on all of its 3,000 diesel contracts and has sent checks to customers who were owed money repaying them in full and with interest. He also said the company had as of June 30 ended all manual rebate calculations.

The manual rebate calculations were the source of the alleged fraudulent activity, as rebates were not calculated automatically but by a Pilot salesperson.

In a statement released July 16 after the settlement, Haslam said Pilot will issue supplemental checks to customers for “any additional interest not included in the original calculation.”

According to the class-action settlement, any Pilot customer can join the class of plaintiffs and have Pilot perform an audit on their account. Per the settlement, Pilot must perform internal audits for the affected accounts to determine how much is owed, which will then be confirmed by independent accountants selected by the court.

The settlement agreement, however, is not an admission of guilt, the court documents say.

A judge in Arkansas court approved the settlement agreement — Click here to view the entire document filed with the court.

Haslam’s July 12 letter also said six members of the company’s sales team have either resigned or have been terminated since April 15. The company has added several new hires to its sales division.

“We understand that Pilot Flying J still has lots of work to do to regain your trust,” Haslam wrote in his letter. “We are taking aggressive measures to restore, preserve and protect customer relationships.”

Click here to see Haslam’s full letter.

James Jaillet

James Jaillet is the News Editor for CCJ and Overdrive. Reach him at jjaillet@randallreilly.com.

4 comments
Kelly Dooley
Kelly Dooley

I guess the buck stopped at the bottom.  When I was in sales, I received my direction from the top.  These rouge sales people must've had a lot of clout to be able to work this program without direction.  And I wonder why they cheated those clients out of money?  Was that "extra" money going into their pockets?  Don't think so.....

MarkHayward
MarkHayward

It's Nice that Pilot is making an effort to make things right.  It's amazing that anyone thought they could get away with such a massive fraud for multiple years!

  It's good that these Companies were able to settle and get their money, but if the Lawyers are getting 40% then the Customer is still loosing out on a lot.

  Of course I am wondering how many Employees will get Prison time and I wonder if they can Prove that Jimmy Haslam was aware of this scam going on in his Company.

MarkHayward
MarkHayward

Yes extra profits meant extra bonuses to the Sales Team.  They even had a Microsoft Excel spread sheet  showing how much the rebates should have been and how much they cheated the Customers out of.  They called this "Manual Rebates"  or  "Jacking the Customer"  The Secretary or account who blew the whistle was supposed to destroy these spread sheets, but she kept a copy of them.

MarkHayward
MarkHayward

Last I heard 5 Pilot Employees have plead guilty and are cooperating with Prosecutors.  They are getting reduced sentences or avoiding Prison etc. for cooperating.

  It sounds like the Grand Jury will be able to get to the bottom of this.



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