Covenant Logistics to pay $700,000 to settle discrimination allegations

A Chattanooga, Tennessee-based trucking and logistics company has agreed to pay $700,000 to settle allegations by the U.S. Department of Justice that it routinely discriminated against noncitizen workers when checking their permission to work in the United States.

As part of the agreement, Covenant Logistics and its wholly owned subsidiary, Transport Management Services, also agreed to train their employees on the Immigration and Nationality Act’s anti-discrimination requirements, revise their employment policies and be subject to monitoring by the DOJ.

“Employers cannot discriminate against non-U.S. citizens by demanding specific or unnecessary documents from them to prove their permission to work,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division in a statement. “The Justice Department is committed to ensuring compliance with our federal civil rights laws so that non-U.S. citizens with permission to work can contribute their talents to our workforce.”

Tripp Grant, executive vice president and CFO of Covenant, provided the following statement to FreightWaves regarding the agreement:

“Covenant fully cooperated with the Department of Justice’s (DOJ) investigation. While we disagree with the DOJ’s assessment of the company’s practices, we reached this settlement to avoid costly and time-consuming litigation despite the DOJ not finding a single actual instance in which an employee was terminated or was refused employment related to our employment verification practices. Covenant is committed to maintaining an environment in which it does not discriminate against permanent residents or others.”

According to the settlement agreement, the DOJ’s Immigrant and Employee Rights (IER) Section notified Covenant in July 2021 that it had initiated an investigation to determine whether there had been any unfair employment practices prohibited under the anti-discrimination provision of the INA.

“IER concluded based upon its investigation that there is reasonable cause to believe that [Covenant and its subsidiary] engaged in a pattern or practice of unfair documentary practices … from January 2020 through at least August 2022,” the settlement agreement states.

During that time frame, the DOJ alleges that the companies “routinely discriminated against non-U.S. citizens by requiring lawful permanent residents to show their Permanent Resident Cards (known as green cards) and by requiring other non-U.S. citizens to show documents related to their immigration status,” the DOJ release states. “Federal law allows all workers to choose which valid, legally acceptable documentation to present to demonstrate their identity and permission to work, regardless of citizenship status, immigration status or national origin.”

Covenant was founded in January 1986 by David and Jacqueline Parker. The company became a publicly traded company (NASDAQ:CVLG) in 1994.

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