Digital freight brokerage Mothership Technologies is suing less-than-truckload carrier Central Freight Lines (CFL) for nearly $508,000 in unpaid invoices, citing breach of contract.
The lawsuit alleges that Waco, Texas-based CFL, a 95-year-old LTL carrier owned by Jerry Moyes, stopped paying Mothership, a Los Angeles-based freight matching company, in mid-October.
Central Freight declined to comment on the Mothership lawsuit, according to Darla Shaw, vice president of corporate communications, in a statement to FreightWaves.
Mothership claims in the suit that it began providing freight brokerage services to CFL in July 2020, but was forced to suspend CFL’s account on Nov. 16 for nonpayment.
The suit, filed recently in the U.S. District Court for the Central District of California, claims breach of contract, open book accounts and unjust enrichment/implied contract against CFL.
Mothership did not respond to FreightWaves’ request for comment.
CFL has 1,651 power units and 1,175 drivers, according to the Federal Motor Carrier Safety Administration SAFER website.
CFL shakeup
In early December, CFL announced it was reshuffling some executives, naming Moyes as interim president and chief executive officer. Moyes, who founded Swift Transportation, owns CFL.
The same day, Moyes replaced CFL President Michael Brennan with a former CFL executive, Steve Vondra, who returned as the carrier’s chief operating officer.
Brennan was forced to slash employee compensation in early April because of a significant revenue drop because of the COVID-19 pandemic.
Some CFL drivers told FreightWaves that while their pay was not cut in April, their hours were reduced to 35 hours per week.
“Before COVID, our pay was $22.50, which is still below average compared to our competitors,” the driver, who did not want to be named, told FreightWaves.
Then around August, the drivers’ pay was bumped up to $26 per hour, but the increase didn’t last long, said one driver.
“About a month ago, we were notified that our wages were going to be cut by 10%,” the CFL driver told FreightWaves. “We were finally feeling respected — and being paid what we are worth — then this happened.”
According to an internal memo obtained by FreightWaves, CFL is addressing its pay reduction plan. Vondra said hourly employees will get a 5% bump on its Jan. 4 pay period and another 5% increase is planned for March 15.
Salaried and executive employees’ pay was also reduced, but Vondra said pay increases will not be restored until after March when the company reevaluates its financial health.
“We must however do this in phases so as not to overextend our operations financially,” Vondra said in the memo.
Drivers said they were surprised to find out Central Freight Lines was one of four trucking-related companies that received the maximum award of $10 million through the U.S. Small Business Administration’s Paycheck Protection Program (PPP).
Forgivable loans through the PPP started out with $350 billion in the CARES Act, signed into law by President Donald Trump in late March and replenished in April with an additional $320 billion.
“Our hours were cut, then we had to take a 10% pay cut right before Christmas, so where did all that [PPP] money go,” said one CFL driver from Georgia.
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Read more articles by FreightWaves Senior Editor Clarissa Hawes.
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