9 .	Legal Proceedings

We are a defendant in certain class-action lawsuits in which the plaintiffs are current and former California-based drivers who allege claims for unpaid wages, failure to provide meal and rest periods, and other items. During the

first

half of

2014,

the District Court in the lead class-action granted judgment in our favor with regard to all claims. The plaintiffs appealed the case to the United States Court of Appeals for the Ninth Circuit. In

July 2017,

the Ninth Circuit issued a Memorandum decision vacating the judgment in our favor and remanding the case to the District Court for further proceedings. The Ninth Circuit denied our Petition for Rehearing En Banc in

November 2017.

We filed a Petition for a Writ of Certiorari in the Supreme Court of the United States seeking review of the Ninth Circuit’s decision, but the Supreme Court denied the Petition in

June 2018.

The case is pending before the United States District Court for the Central District of California. Plaintiffs filed a motion for partial summary judgment on their claims on

June 11, 2018.

July 23, 2018

the Court entered an Order granting in part and denying in part Plaintiffs’ motion for partial summary judgment. The Court granted partial summary judgment on the issue of whether our activity-based compensation system violates California law concluding that it does to the extent our system fails to separately compensate drivers for rest breaks and other nonproductive time. However, the Court declined to enter summary judgment as to our liability on any of Plaintiffs’ claims. We also filed motions for partial summary judgment and to decertify the class on

July 2, 2018.

The Court has

not

yet entered an Order deciding our motions. The case is currently scheduled to begin trial in the

third

quarter of

2018.

The overlapping claims in the other lawsuits remain stayed pending final resolution of the appellate process or a final decision in the lead class-action case. We cannot reasonably estimate at this time the possible loss or range of loss, if any, that

may

arise from these lawsuits, however, in

2017,

we recorded a

$10

million reserve representing an amount we deem acceptable for the settlement of these claims.

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 has requested the same, and the arbitration process has progressed and remains pending. BNSF provides a significant amount of rail transportation services to our JBI business segment. At this time, we are unable to reasonably predict the outcome of the arbitration, and, as such,

gain or loss contingency can be determined or recorded. Normal commercial business activity between the parties, including load tendering, load tracing, billing and payments, has continued and 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.