9 .	Legal Proceedings

We are a defendant in certain alleged class-action lawsuits in which the plaintiffs are current and former California-based employee drivers who allege claims for unpaid wages, failure to provide meal and rest periods, and other items. In the lead class-action, we reached an agreement and recorded a reserve in

September 2018

to resolve all pending claims for a class settlement payment of

$15

million, subject to Court approval. The United States District Court for the Central District of California entered an order granting final approval of the class settlement on

April 23, 2019.

We anticipate the overlapping class claims in the other alleged class-action lawsuits that have been stayed pending final approval of the class settlement in the lead class-action case will be dismissed.

January 2017

we exercised our right to utilize the arbitration process to review the division of revenue collected beginning

May 1, 2016,

as well as to clarify other issues, under our Joint Service Agreement with BNSF Railway Company (BNSF). BNSF requested the same, and the arbitration process is on-going. In

October 2018

we received the arbitrators’ Interim Award. The details of the Interim Award are confidential and require the parties to submit additional information requested by the arbitrators to decide certain unresolved matters. For the determined components of the Interim Award, we recorded an

$18.3

million pre-tax charge in the

third

quarter

2018

related to certain charges claimed by BNSF for specific services requested for customers from

April 2014

through

May 2018.

December 2018

the arbitrators’ issued their Clarified Interim Award of

October 2018

resulting from some of the parties’ additional submissions to the Panel regarding certain issues related to determining the revenue division between the parties. In

January 2019

the Panel issued its Second Interim Award ordering that

$89.4

million is due from the Company to BNSF resulting from the adjusted revenue divisions relating to the

2016

period at issue (

$52.1

million) and for calendar year

2017

(

$37.3

million). The parties have made further submissions on the revenue divisions for calendar year

2018

and going forward, as well as other confidential issues raised during the arbitration process so that the panel can issue an appropriate interim and/or final award regarding all issues raised during the proceeding. We recorded pretax charges for contingent liabilities in the

fourth

quarter

2018

$89.4

million claimed by the BNSF for the period

May 1, 2016

through

December 31, 2017

and

$44.6

million for the period

January 1, 2018

through

December 31, 2018,

for a total of

$134

million.

The other financial implications from the Interim Award and the Clarified Interim Award will

not

be fully determined until the arbitrators issue additional award(s) following their review of each party’s requested additional submissions. At this time, we are unable to reasonably predict the final outcome of the arbitration, and, as such,

further gain or loss contingency can be determined or recorded. If decided adversely, this matter could result in a liability material to our financial condition or results of operations. BNSF provides a significant amount of rail transportation services to our JBI business segment. Normal commercial business activity between the parties, including load tendering, load tracing, billing and payments, is expected to continue on a timely basis.

We are involved in certain other claims and pending litigation arising from the normal conduct of business. Based on present knowledge of the facts and, in certain cases, opinions of outside counsel, we believe the resolution of these claims and pending litigation will

not

have a material adverse effect on our financial condition, results of operations or liquidity.