A group of owner-operators has accused Michigan-based Red Line Logistics Inc. and two company officials of understating freight revenue reported to drivers and keeping the difference.
The proposed class action lawsuit was filed Sept. 17 in the U.S. District Court for the Eastern District of Michigan by Adis and Denisa Bajgoric, Sasa Susa, doing business as ASP Logistics, Mensud Topic, Edin Topic and George Ureche. The defendants named in the case are Red Line Logistics, Zaim Bajgoric and Anel Penava.
The case is listed as Bajgoric et al. v. Red Line Logistics Inc. et al., No. 2:26-cv-13533. The proposed class action seeks more than $1 million in damages on behalf of the plaintiffs.
At the heart of the complaint is an alleged discrepancy between the amounts Red Line received from customers for hauling freight and the amounts disclosed to owner-operators whose compensation was based on load revenue.
According to the plaintiffs, Red Line obtained freight from third-party customers and then assigned those loads to owner-operators operating under exclusive lease agreements. Under those agreements, drivers were to receive a percentage of the revenue generated by the loads, after certain costs and expenses were deducted.
One agreement cited in the complaint states that the owner-operator would receive 80% of the load value, while Red Line would retain 20%. The lawsuit also alleges that drivers were prohibited from hauling for other carriers during the term of those agreements.
The plaintiffs claim, however, that Red Line did not always disclose the actual amount it received for individual loads.
The complaint gives a hypothetical example in which Red Line allegedly bids $10,000 for a load but informs the owner-operator that the load is worth $7,500. In that scenario, Red Line would allegedly keep the $2,500 difference before calculating the driver’s contractual share based on the lower amount.
The allegations have not been proven in court. Red Line, Bajgoric and Penava had not filed a response to the claims in the publicly accessible docket reviewed by FreightWaves.
Lawsuit Alleges Two TMS Platforms Were Used to Display Different Load Values
The complaint offers an unusually detailed description of how the alleged discrepancies were created.
According to the lawsuit, Red Line used a transportation management system known as Apex that contained information about loads, including their actual total values. The plaintiffs allegedly did not have access to the Apex system.
Instead, drivers had access to Sylectus, another transportation management system used to assign loads and manage driver-related information, according to the complaint.
The plaintiffs allege that Red Line would first enter the actual load information into Apex and then instruct a dispatcher to reduce the stated value by a specific amount before entering the information into Sylectus.
As a result, drivers allegedly accepted jobs believing that the figure displayed in Sylectus represented the total value of the load.
According to the complaint, Red Line then sent settlement statements by email that purported to show the amount paid by the third-party customer and the driver’s share after expenses.
The plaintiffs allege that some of those statements did not reveal the actual amount Red Line received, allowing the carrier to retain the difference. They claim the practice was repeated on individual trips over a period of years.
The lawsuit estimates that the related electronic communications could number in the thousands. It also alleges that information concerning the purported load values was exchanged through email, text messages and voice-over-internet-protocol applications.
The complaint states that the trucking operations involved interstate and foreign commerce across the United States, Mexico and Canada.
Plaintiffs Bring RICO Claims
The plaintiffs characterize the alleged conduct as a pattern of racketeering and are bringing claims under the federal Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO.
They allege that the electronic transmission of false load values, invoices and settlement information amounted to multiple acts of wire fraud carried out as part of the alleged scheme.
The proposed class is estimated to include approximately 50 or more owner-operators, with alleged damages exceeding $1 million.
The plaintiffs are seeking actual damages that could be trebled under RICO, in addition to punitive damages, attorneys’ fees, an accounting of profits and other forms of relief.
The complaint also alleges breach of contract. The plaintiffs maintain that they were entitled to a percentage of the amounts third-party customers paid Red Line to transport freight, but that the defendants instead reported lower amounts and kept the difference.
Several exhibits are attached to the complaint, including an interstate vehicle lease agreement and a driver pay sheet. The pay sheet lists four trips showing $7,000 in trip-related pay before deductions.
Those exhibits provide documentation of portions of the contractual and payment relationship between the parties, but they do not, on their own, establish the alleged difference between what customers paid Red Line and what the company reported to its drivers.
Red Line, which is based in Sterling Heights, Michigan, has active interstate motor carrier authority and is listed in currently available carrier data with 38 power units and 46 drivers.
FreightWaves contacted Red Line Logistics, Zaim Bajgoric and Anel Penava for comment on Sept. 25 and again on Oct. 1, but had not received a response as of publication.
FreightWaves also contacted plaintiffs’ attorney Jeff A. DeLaunay of Miller Cohen on Sept. 25 and Oct. 1 for additional information. DeLaunay had not responded as of publication.
Why It Matters
The lawsuit puts the transparency of percentage-of-revenue compensation arrangements under scrutiny, with the plaintiffs alleging that drivers were compensated using freight values that were lower than the amounts the carrier actually received from customers.
