Koch Trucking to pay $500,000 to settle EEOC lawsuit over strength test

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Trucking news and briefs for Friday, Dec. 10, 2021:

Koch Trucking to pay $500k settlement in sexual discrimination case

Stan Koch and Sons Trucking (CCJ Top 250, No. 93) will pay $500,000 and provide other relief to settle a sexual discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission, the federal agency announced this week.

According to the EEOC's lawsuit, Koch’s use of an isokinetic strength test, the CRT Test developed by Davenport, Iowa-based Cost Reduction Technologies, discriminated against women truck drivers because of their sex. Specifically, EEOC alleged that the CRT Test disproportionately screened out women who are qualified for truck driver positions at Koch.

Such alleged conduct violates Title VII of the Civil Rights Act of 1964, which prohibits workplace discrimination, including the use of employment practices that have a disparate impact on women because of their sex and that are not job-related and consistent with business necessity.

The alleged discrimination took place from about 2013 to 2017, and the company said it stopped using the CRT Test before EEOC filed its lawsuit.

Under the consent decree resolving the case, Koch is required to pay $500,000 in monetary damages and make job offers to a class of women whose job offers were revoked by Koch after they failed the CRT Test.

The decree also enjoins Koch from using the CRT test, and, if it chooses to use any other physical abilities test that has a disparate impact on female drivers, it must first demonstrate that the test is job-related for the position in question and consistent with business necessity. The decree also requires Koch to make regular reports to EEOC regarding its hiring practices for the duration of the decree.

Securities traders have positive view of trucking heading into 2022

Trucking company operators’ financial health remains resilient amid heightened demand pressure from ongoing global supply chain issues, U.S. inland transportation backlogs and labor issues, according to asset-backed securities (ABS) ratings firm Fitch Ratings.

Fitch says that trucking companies are experiencing low default rates and stable transportation-backed ABS performance. Additionally, limited supply of Class 8 trucks and trailers cause increased asset values, driving up recovery rates within ABS transactions.

Fitch notes that the increase in goods demand as a result of the economic recovery has put a strain on trucking capacity, putting a strain on driver availability. To overcome this, fleets are increasing wages to attract and retain drivers, which could erode margins, Fitch adds. “Inability to meet shipping demands will limit overall fleet gross profits and could drag on obligor credit quality,” Fitch says. “However, fleet operators are able to charge higher freight/shipping rates to partially offset restricted capacity and labor constraints in the near term, but if these constraints are prolonged it could negatively affect operator growth in the long term.”

Fitch expects shipping backlogs to work themselves out over the first half of 2022, alleviating pressures on demand and rates, though strong demand will likely remain robust. ABS ratings, which already incorporate default and recovery rate stresses, are expected to be remain stable.

Carriers recognized in 24th annual Ryder Carrier Quality Awards

Ryder System has named winners in 13 categories in its 24th annual Ryder Carrier Quality Awards.

The award program recognizes U.S. and Canadian carriers for service quality and operational excellence based on a variety of metrics, including on-time performance, customer service, economic value, claims handling, and technology applications. This year, Ryder added a new category to recognize the Most Innovative Carrier of the Year.

“Given the pace of change in the transportation and logistics industry, two factors carry the most weight in this year’s award program – a carrier’s commitment to investing in technology and in embracing innovation,” said Dave Belter, vice president and general manager of transportation management for Ryder. “Those two factors have become the drivers of everything else. That’s why we encourage our carrier partners to adopt RyderShare, our one-of-a-kind visibility and collaboration technology tool. It’s the ultimate digital platform for all goods moving across the supply chain and a new standard for our transportation management partners.”

The recipients of this year’s Ryder Carrier Quality Awards are:

  • Most Innovative Carrier of the Year – Mesilla Valley Transportation
  • National Dry Van Carrier of the Year – Mesilla Valley Transportation
  • Regional Dry Van Carrier of the Year – Ozark Motor Lines
  • Intermodal Carrier of the Year – J.B. Hunt Transport
  • Refrigerated Carrier of the Year – Prime, Inc.
  • Flatbed Carrier of the Year – Melton Truck Lines
  • National LTL Carrier of the Year – Saia LTL Freight
  • Regional LTL Carrier of the Year – Tony’s Express
  • Specialized Carrier of the Year – Three Rivers Trucking
  • Canadian Truckload Carrier of the Year – Challenger Motor Freight
  • Canadian LTL Carrier of the Year – Manitoulin Transportation
  • Freight Forwarder of the Year – Masterpiece International
  • Maritime Carrier of the Year – TOC Logistics