Springfield-based transportation company Prime Inc. has to retool its training practices after a judge ruled last month it effectively was denying opportunities to women. The judgment comes for Prime as the company’s leaders approach the end of a long-running Chapter 11 reorganization for its business affiliate O&S Trucking Inc.
Gender training On Aug. 14, a federal judge ruled against Prime Inc. in a gender discrimination lawsuit brought on by the U.S. Equal Employment Opportunity Commission in 2011.
The ruling states Prime violated the Civil Rights Act of 1964 by discriminating against female truck driver applicants in only offering training by female instructors.
According to the ruling, Prime engaged in a pattern of discrimination by denying employment opportunities to women as a result of its same-sex training procedures. Because Prime had few female trainers, the judge found female trainees were required to wait extended periods of times – sometimes up to 18 months – resulting in some female drivers losing employment qualifications. The lawsuit claimed male applicants were more quickly assigned to male trainers.
“While Prime would like to claim it was protecting women, its policy denied employment opportunities to them,” said Andrea Baran, regional attorney of the EEOC’s St. Louis district, in a statement. “Women are entirely capable of understanding and assessing the risks of truck driving. But one of those risks should not be sexual harassment.
“Employers should prevent sexual harassment through training and strict enforcement of effective anti-harassment policies, not by segregating male and female employees.”
Through attorney James Sullivan of Polsinelli PC, Prime issued a statement on the outcome of the case.
“In 2004, Prime implemented a training policy that required that its over-the-road truck driver trainees be trained by someone of the same gender. Prime implemented the policy in good faith, believing that significant concerns for the safety and privacy of its female driver trainees satisfied a long-recognized exception to the discrimination laws. In its recent ruling, the court did not agree that this exception applied to this case. Prime respects the ruling of the court. Significant issues though still remain to be determined in this case.”
Prime officials declined to speak further about the challenges posed by the ruling.
According to the EEOC, the case now is pending in the U.S. District Court in Springfield to determine damages and remedies for women harmed by Prime’s policies. The trucking company employs some 2,000 people and posted 2013 revenue of $1.2 billion, representing three-year growth of 23 percent, according to Springfield Business Journal archives.
A final vote Three weeks after Jim O’Neal resigned as Springfield mayor in May 2012, he filed for Chapter 11 bankruptcy reorganization for the company he co-founded in 1981. Now, the case appears to be weeks away from reaching a conclusion.
Jonathan Margolies, the Kansas City attorney representing O&S in the case, said a confirmation hearing has been set for Sept. 18, and he expects the court would then agree to the terms of an amended plan of reorganization.
“The voting has taken place on the plan and it has been overwhelmingly approved by the creditors who voted on the plan,” Margolies said. “We think it is a fair and equitable plan. It is a plan O&S can and will perform.”
A third amended plan of reorganization, entered in June, outlined 10 classes of creditors to be paid, including Caterpillar and Daimler Truck. Among others getting money: Navistar Financial Corp. would be paid a little more than $250,000 over 30 months with 4.25 percent interest; Axis Capital Inc. would get $225,000 plus interest; and $250,000 would be available in a pro rata share for general unsecured claims.
Court documents show the company had estimated assets of $50,000 or less against estimated liabilities of $10 million to $50 million. According to the bankruptcy proceedings, O&S Trucking owes more than 400 creditors, including a handful of unsecured claims around $200,000 apiece for maintenance contracts, trade debts, a wrongful death settlement and fuel purchases. Among the largest debts is a $4 million bill for 63 trailers financed by Caterpillar Financial Services Corp.
“Given the nature of this particular case, the complexity of the case, the various level of creditors, the relatively large number of secured creditors, it is totally unsurprising that this case has taken a little more than two years to get to some conclusion,” said Margolies, a bankruptcy attorney of more than 30 years.
A key point in the case was a judge’s mid-2012 approval of the formal affiliation between O&S and Prime. The agreement as approved allows O&S to keep 80 percent of freight revenues; use Prime’s buying power for fuel; utilize Prime’s truck fleet; and access Prime’s administrative and marketing resources to reduce overhead.
In the deal, O’Neal was scheduled to receive 3 percent commission for revenue generated by O&S for hauling freight in the first year, 2 percent in the second year and 1 percent in the third year. According to the July operating report, O’Neal’s monthly salary from Prime was $1,600.
Steve Crawford, Prime’s general counsel, said he expects the affiliation with O&S to continue after the conclusion of the case. According to the monthly operating report, O&S generated gross income of $1.2 million in July.
“As for what the future holds for the contractual relationships between our companies, we obviously can’t be certain. However, we are optimistic that it will continue to grow and prosper,” Crawford said via email.[[In-content Ad]]
