Note 15 — Commitments and contingencies

The Company is involved in certain claims and pending litigation primarily arising in the normal course of business. The majority of these claims relate to workers compensation, auto collision and liability, and physical and cargo damage. The Company expenses legal fees as incurred and accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. It is at least reasonably possible that the effect on the financial statements of significant estimates involving contingencies will change within one year of the date of the financial statements due to one or more future confirming events. If such changes occur, they could be material to the financial statements. The Company has disclosed all significant estimates and assumptions that could potentially be affected by future confirming events.

Independent Contractors Misclassification Class Actions

In August 2016, a truck driver who contracted with Tribeca Automotive, Inc. filed a Complaint in Essex County Superior Court of New Jersey, bringing claims on behalf of himself and those similarly situated against Tribeca and its owners. An amended class complaint was filed in April 2022. The putative class alleges that Tribeca misclassified contracted truck drivers as independent contractors, rather than “employees” under applicable law. As a result, the class seeks overtime and unlawful deductions in violation of New Jersey Wage and Hour Law and New Jersey Wage Payment Law. In June 2026, the parties reached a settlement in principle and executed a class settlement agreement providing for a gross settlement amount of up to $4.0 million, in which Tribeca continues to deny liability. The settlement remains subject to final court approval. The net settlement amount is subject to each class member taking action in response to the Notice of Settlement and therefore cannot be reasonably estimated at this time. We are entitled to indemnification under the Purchase Agreement from the sellers of Tribeca for up to $2.5 million relating to this liability.

In May 2025 and December 2025, respectively, two business owners and truck drivers filed complaints with putative class action claims and representative actions under the Private Attorneys General Act in California state court against certain of the Company's subsidiaries and affiliates. Amended complaints were filed in October 2025 and May 2026, respectively, reducing the scope of claims. The two actions generally allege that certain drivers operating for third-party companies under broker-carrier contracts were improperly classified as independent contractors rather than “employees” under applicable law. Based on these allegations, the plaintiffs seek damages, civil penalties, attorneys’ fees, and other relief under California wage and hour laws. The claims asserted in the two actions are substantially similar and involve overlapping factual allegations, putative class populations, and time periods. The Company’s subsidiaries deny liability and are vigorously defending this matter.

Former Employee Class Action

In May 2024, a former employee filed a class action lawsuit against Deluxe Auto Carriers, Inc., in Riverside County Superior Court in California. The lawsuit alleges class claims against Deluxe for unpaid minimum and overtime wages, non-compliant meal and rest periods, unreimbursed business expenses, and inaccurate wage statements, among other claims. A class settlement was reached for $400,000, in which Deluxe continues to deny liability. In February 2026, the settlement was approved by the court, and subsequently paid in April 2026 from amounts previously accrued on the Company’s consolidated balance sheet. We received full reimbursement from the sellers of Deluxe pursuant to the indemnification provisions of the Purchase Agreement, and no related receivable or liability remained outstanding as of June 30, 2026.

Civil Complaint

In November 2025, a second amended civil complaint was filed in federal court in South Carolina against the Company, its subsidiaries Tribeca Automotive, Inc. (“Tribeca”) and Proficient Services, Inc. (f/k/a PAL Stock Acquiror, Inc.) and an individual working on behalf of Tribeca arising out of a vehicular accident involving one of Tribeca’s vehicles. In March 2026, the Company settled the case for $3 million in order to avoid the cost, risk and distraction of continued litigation. In May 2026, the settlement was approved by the court and paid from amounts previously accrued on the Company’s consolidated balance sheet.