28 Oregon Trucking Association, Inc. Oregon Truck Dispatch determination. From labor’s perspective, a finding that a worker is an employee for purposes of the FLSA will make it difficult for companies to maintain independent contractor status under the NLRA. Coincidentally, workers have to be employees to be covered by the NLRA and its protections for collective bargaining. Moreover, bringing class action lawsuits for misclassificationrelated claims has been a staple for plaintiffs’ attorneys. As compared to the increased certainty of its predecessor regulation, DOL’s final rule will pose challenges for the trucking industry. For example, although a worker’s investment in their business is a common indicator of independence, the proposal measures a worker’s investment in the business relative to the putative employer’s investment in the business. Under this relative comparison, a small investment would be indicative of employee status. In another example, measures implemented to comply with safety standards or customer requirements may be considered employer-like control. Organized labor often argues it is protecting the health and safety of workers, so it seems odd to discourage motor carriers from requiring safety standards that protect the worker. The final rule also considers whether the work performed by a worker (driver) is integral to the potential employer’s (carrier’s) business. Some may recognize this as the dreaded “B” prong of the California AB’s ABC test. At least under DOL rule, a finding that they are in the same line of business does not result in a determination of employee status. One would expect labor advocates to be active and influential at the NLRB and the USDOL, but their influence is impacting an agency closer to home for trucking—the FMCSA. After years of dealing with class action lawsuits alleging failure to provide additional breaks under state meal and rest break laws (e.g., California and Washington), FMCSA found those laws preempted in 2018 and 2020, respectively. In updating its Hours of Service regulations, FMCSA had already addressed what breaks were necessary for driver health and safety. The Teamsters opposed FMCSA’s preemption determination and challenged it in court, where the California preemption determination was upheld by the U.S. Court of Appeals for the Ninth Circuit. Last summer, while under pressure from the Teamsters for not doing more to step in to save Teamster jobs at Yellow, FMCSA took the remarkable step of inviting parties to submit petitions for a waiver from its preemption determinations. In essence, FMCSA understands its preemption determination to be legally sound but invited the Teamsters and others to initiate a new way to get around their conclusion. The absence of data proving the preemption determination has caused a degradation in motor carrier safety suggests this is a political, not safety, undertaking. This FMCSA has also demonstrated a new-found willingness to wade into economic issues. Admittedly at Congress’s direction, FMCSA has convened a Truck Leasing Task Force (TLTF) that, in a fairly pre-judged manner, is examining how trucking equipment leases are inequitable. Having convened several meetings, the TLTF is still struggling to distinguish between an equipment lease and an operating lease agreement regulated by 49 C.F.R. Part 376, the latter of which Congress did not authorize the task force to address. Some might say it is mission creep. The same can be said for FMCSA’s study of detention time—an economic issue with unproven links to motor carrier safety. In some states, the independent contractor model that has a long and important history of being a part of trucking remains under siege, because there is a belief that independent contractors, despite their intentional choice, need to be wrapped in a cocoon of employee status. This notion persists despite data indicating that independent contractors are very satisfied with the independence they have at work and can generally earn more net income on average than company employee drivers earn in wages. Again, organized labor’s interests are served when more workers are categorized as employees than independent contractors. That does not mean that an individual worker’s interests are similarly served. Perhaps more slowly than some would have liked, the trucking industry has reacted to the market demands of a driver shortage by increasing pay and making intentional efforts to provide drivers more home time. Trucking companies will continue to have to respond to market dynamics. However, in the current political climate where organized labor appears resurgent, and with a willing partner in the Biden White House, trucking companies will also have to prepare for and respond to market distortions induced by laws and regulations. That may range from ensuring plans are in place to rapidly and appropriately respond to a potential union organizing campaign to routinely re-assessing contracts, policies, and procedures for carriers utilizing independent contractors. So, yes, the future is largely unknowable, but we do know the current environment will present challenges to trucking companies and their workforce. This article was originally published in Arkansas Trucking Report Volume 28, Issue 6 and has been updated. 1. Any opinions expressed herein are solely those of the author and not necessarily those of Scopelitis, Garvin, Light, Hanson & Feary. State of the Unions, cont.
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