Item 1A. Risk Factors
ITEM 1A: RISK FACTORS
Except as noted below, there have been no material changes to our risk factors as previously disclosed in Item 1A to Part 1 of our Form 10-K for the fiscal year ended December 31, 2020.
A determination that independent contractors are employees could expose us to various liabilities and additional costs.
Federal and state legislation, as well as tax and other regulatory authorities, often seek to assert that independent contractors in the transportation service industry are employees rather than independent contractors. An example of such legislation, recently enacted in California, had been under a judicial stay with respect to trucking companies while a legal challenge to the law is pending; however, the judicial stay was reversed by a Ninth Circuit panel on April 28, 2021. While the panel’s decision may be subject to a petition for rehearing, there can be no assurance that the California law will not be enforceable against trucking companies in the near future or that interpretations supporting the independent contractor status will not change, that other federal or state legislation will not be enacted, or that various authorities will not successfully assert a position that re-classifies independent contractors to be employees. If our independent contractors are determined to be our employees, that determination could materially increase our exposure under a variety of federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort laws, as well as our potential liability for employee benefits. In addition, such changes may be applied retroactively, and if so, we may be required to pay additional amounts to compensate for prior periods. Any of the above increased costs would adversely affect our business and operating results.
We are subject to certain risks arising from doing business in Mexico.
As we continue to grow our business in Mexico, we are subject to greater risks of doing business internationally, including but not limited to the following:
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Fluctuations in foreign currencies;
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changes in the economic strength of Mexico;
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difficulties in enforcing contractual obligations and intellectual property rights;
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burdens of complying with a wide variety of international and U.S. export and import laws; and
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social, political, and economic instability.
We also face additional risks associated with our business in Mexico, including but not limited to the following:
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Changes in Mexican law that would prohibit the hiring of outsourced personnel except under specified circumstances;
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any change in Mexican law that materially modifies the calculation of an employer’s profit-sharing payments to employees;
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the adoption and enforcement of restrictive trade policies;
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the imposition of any import or export tariffs, taxes, duties, or fees; and
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potential disruptions or delays at border crossings due to immigration-related issues or other factors.
If we are unable to address business concerns related to our Mexican operations in a timely and cost-efficient manner, our financial position, results of operations, or cash flows could be adversely affected.
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ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4: MINE SAFETY DISCLOSURES
Not applicable.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.