Transportation, Distribution & Logistics

Mexican truckers file lawsuit against Celadon: Trucking giant disputes discrimination, calls other claims 'a form of extortion'

April 10, 2006

To Celadon Group Inc., it's ambulance chasing, Tex-Mex style. Mucho absurdo.

To a handful of Texas lawyers who filed suit against the Indianapolis-based trucking company last month, it's an opportunity to haul home triple damages on allegations of racketeering and wage discrimination against Mexican citizens who drove Celadon's trucks on this side of the border.

At the least, the allegations in a lawsuit filed in U.S. District Court in Laredo, Texas, reflect a complex relationship between North American neighbors, said one expert.

"This is another example of more of the challenges of economic liberalization between the two countries," said Rodolfo Hernandez Guerrero, director of the Center for U.S.-Mexico Studies at the University of Texas at Dallas.

The suit was filed on behalf of nearly a dozen former and three current employees of Celadon's Mexican subsidiary, Jaguar Transportation Services.

They agreed to drive Celadon trucks in Texas from a company facility in Laredo, along the border.

The drivers allege they were promised pay of 24 cents a mile but received 17 cents a mile for driving in Texas. They claim they earned between 11 cents and 28 cents less than American drivers on similar routes.

They previously filed discrimination complaints with the Equal Employment Opportunities Commission and the Texas Workforce Commission. In January, the drivers filed suit in Webb County District Court, alleging national origin discrimination, breach of contract and common law fraud.

The suit also alleges a pattern of racketeering, under the guise that Celadon's use of lower-wage Mexican workers put downward pressure on wages in the region and reduced employment prospects for drivers who are U.S. citizens.

Celadon broadly denies the allegations. The Indianapolis company says that, though the drivers were behind the wheel of Celadon trucks, they worked for Jaguar, not Celadon, so they had no right to expect to be paid under Celadon's wage scale.

Celadon President Thomas Glaser said that, if anything, trucking companies can't find enough drivers in the U.S. willing to take jobs and have boosted wages to attract them.

Celadon officials say the arrangement with Jaguar drivers was in compliance with the law and that drivers had the appropriate visas to work here.

Another senior Celadon executive, who asked not to be named, said drivers actually were paid in excess of $25,000 a year.

"It's a form of extortion," the unnamed executive said, vowing to fight the litigation vigorously.

Celadon officials said Jaguar is a subsidiary, but declined to disclose what percentage of Jaguar Celadon owns.

Some argue that Mexican subsidiaries are little more than shell companies.

"That's the loophole Celadon is trying to drive through," said John Judge, an attorney representing the Mexican drivers. He argues that Jaguar and Celadon essentially are the same companies.

"There's been the suspicion we've had for a long time [about such deals], but this is the first time we've been able to pinpoint anything ... This is outrageous," said Chuck Mack, secretary-treasurer of Teamsters Local 70 in Oakland, Calif.

Celadon drivers are non-union.

Celadon officials said lawyers for plaintiffs essentially approached the drivers while in their trucks and tried to drum up the case.

Recently, Celadon petitioned to move the case to Ellis County Texas, in the northeast corner of the state. Plaintiffs counter that the company is looking for a more "blueeyed" and sympathetic jury.

Celadon said Ellis County is the home of its principal office in Texas.

The suit strikes at the heart of Celadon's plans to capitalize on provisions of trade agreements that eventually will allow Mexicans to drive far into the United States. Implementation has been stalled by how trucks would be inspected at the border.

Celadon is among the nation's 15-largest truckload carriers. The company for three years has been tapping Jaguar drivers to make short hauls within Texas.
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