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exclusive lease agreement set forth a factor (factor)20 to which
TLC and each trucking company client agreed and which such client
was to multiply by the batch report lump sum amount in order to
calculate the lease fee that such client owed to TLC for each
driver-employee whom TLC leased to such client.
The factor to which TLC and each trucking company client
agreed was intended to produce a lease fee sufficient to cover:
(1) The batch report lump sum amount with respect to each driver-
employee whom TLC leased to such trucking company client; (2) the
employer’s share of employment taxes on the gross wages to which
each such driver-employee was entitled; (3) workers’ compensation
insurance premiums attributable to the gross wages earned by each
such driver-employee; (4) other expenses that TLC incurred as
costs of earning such lease fee, e.g., expenses for sales repre-
sentatives and managers, legal and accounting services, and other
19(...continued)
driver-employee was multiplied by the applicable factor (dis-
cussed below) to calculate the lease fee that each trucking
company client owed TLC.
20Pursuant to the exclusive lease agreement, TLC had the
right to modify the factor in the event Federal and State employ-
ment tax rates and/or workers’ compensation insurance rates
changed. From time to time, TLC modified the factor that it
charged each trucking company client in order to reflect changes
in TLC’s workers’ compensation insurance premiums. TLC and each
trucking company client also had the right to modify the factor
if, inter alia, the information that TLC collected from a truck-
ing company client in order to substantiate the per diem amounts
that TLC paid to the driver-employees whom it leased to such
client changed (e.g., if a trucking company client reduced its
over-the-road trucking business).
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