The world of business offers many complications in the art of the deal, some that seem laughably corrupt at a glance.
Even a simple philosophy like working and getting paid can be turned on its ear thanks to the loopholes that exist for corporate entities.
If a worker showed up and did their assigned job for a boss or bosses, logic would dictate those bosses would be responsible for compensating them. But it’s technically the company itself, a legally recognized entity in its own right, that is responsible.
Former employees of a Chicago-based trucking company found this curious fact out the hard way after the company they worked for dissolved while still owing them money. Alex Logistics went out of business, with some of its workers being out over $1,000.
Ikram Kamal and her husband, Ihab, have spent months trying to get the $1,200 they’re owed. They claim they’re having trouble paying their bills because of the payment delays – and they hope that delay doesn’t become permanent.
Kamal is the head of a trucking company and was delivering loads for Alex Logistics in September 2018. Things were okay at first – the deliveries were made, and the pay was delivered in return. Then a series of mysterious letters and calls seemed to be foreboding that a serious problem was afoot.
The Kamals logged an official complaint with the Illinois Department of Labor. They don’t think they’re the only ones who are experiencing this problem, especially after seeing the Google reviews the company had. It was also discovered the company lost its insurance in October 2018, and was voluntarily dissolved last week.
The sad truth is the Kamals and other workers who are owed money may be simply out of luck. This is not a new practice in the trucking industry – companies have long opted to simply dissolve and reform under new titles rather than paying what they owe.
Take for example the case of Fargo Trucking in California. Back in 2015, a judge ordered they pay a total of $8.7 million to drivers after it was found the company cheated them out of a fair wage. It was the largest judgment ever imposed of its kind at the time. But that didn’t mean Fargo Trucking would pay.
The company simply went out of business – they dropped their clients and stripped their company of its assets. Then, with a new name and new Department of Transportation number, they came back in business. That’s right – the same company, simply with a different name and ID, was back in business and now free of legal liability.
Express FTC hauls the same goods in the same trucks for the same clients as Fargo Trucking did – but because they’re technically a different company by the letter of the law, they are under no obligation to pay drivers.
It’s a sad situation but it shows how loopholes can let big companies off the hook and leave the little guy empty-handed.