Transportation Brief: DOL Independent Contractor Rule - And Now We Wait
by Shannon M. Cohen, Gregory M. Feary, Prasad Sharma
January 31, 2023
As most are aware, the Department of Labor (DOL) issued a proposed rule (the Proposed Rule) on worker status under the Fair Labor Standards Act (the FLSA) on October 13, 2022. In the Proposed Rule, the DOL (1) formally rescinds the prior rule promulgated in 2021 under the Trump Administration; and (2) replaces it with a multifactor economic realities test that tilts in favor of finding employee status under the FLSA when compared to the 2021 rule and even the legal status quo prior to the 2021 rule. The public comment period for the Proposed Rule closed on December 13, 2022. The real work for the DOL now begins.
Interest in the Proposed Rule is extremely high, with over 55,000 comments submitted. Among them were industry comments submitted by various entities, including Scopelitis (on behalf of several clients), American Trucking Associations, National Home Delivery Association, state trucking associations, REAL Women in Trucking, Western States Trucking Association, motor carriers, and independent contractor truck drivers writing in support of independent contractor status in the industry. Commenters opposing the proposal across industries argue that the Proposed Rule deviates from existing case law applying the FLSA, imposes greater costs than DOL calculated, and generally is improper under the law. Even the Small Business Administration’s Office of Advocacy, which held a roundtable with DOL officials and small businesses about the Proposed Rule, suggests the DOL should revisit the Proposed Rule due to the burdens the Proposed Rule would place on small businesses that contract with independent contractors and on independent contractors themselves.
There is no deadline for the DOL to publish a final rule. Any final rule will almost certainly be challenged by business groups as improperly promulgated. As a result, DOL is likely to take its time to review the comments and explain its consideration of them as part of the final rule. The final rule will likely take effect 60 days after publication in the Federal Register. Given that some courts have become more skeptical of deferring to agencies and considering the DOL’s change in views coincided with a political change, it is unclear to what extent courts will be influenced by any final rule that survives a legal challenge.
Scopelitis’ Transportation Brief® is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
Transportation Brief: Staggering Jury Award in Fingerprint Collection Case
by Chip Andrewscavage , Alaina C. HawleyA class of truck drivers recently won a $228 million judgment in the first jury trial under the Illinois Biometric Information Privacy Act (BIPA). What did the jury find that led to the quintupled damages and piqued the interest of plaintiffs’ counsel to identify other Illinois companies that may be inadvertently collecting biometric identifiers from employees, contractors, or visitors? More from Scopelitis.
Transportation Brief: California Court Invalidates Employer’s Time Rounding Policy
by Christopher J. Eckhart , James A. EckhartMotor carriers that employ California workers and use time-rounding policies should be aware of the recent decision in Delmer Camp v. Home Depot. What do employers using rounding policies in California need to know as they review their timekeeping and payroll systems to ensure compliance with the appellate court ruling that the employer was not entitled to round the employees’ hours?
Transportation Brief: What Constitutes “Interstate Commerce” Under the Federal Arbitration Act Remains Murky
by Braden K. Core , Prasad SharmaCourts continue to grapple with whether certain workers are “engaged in interstate commerce” for purposes of the exemption from the Federal Arbitration Act for transportation workers. The Ninth Circuit recently held that drivers transporting goods from Domino’s Pizza supply centers to franchisees were engaged in interstate commerce, even though the drivers did not cross state lines. When Domino’s asked the U.S. Supreme Court for a review, the Court vacated the Ninth Circuit’s decision, sending the case back for further proceedings in light of its recent decision in Southwest Airlines Co. v. Saxon. What do Scopelitis attorneys think about how to interpret this decision?
Transportation Brief: Proposed NLRB Rule on Joint Employer Status
by Kelli M. Block , A. Jack FinkleaThe NLRB recently announced a proposed rule on joint-employer status under the National Labor Relations Act. Under the proposed rule, an entity may be deemed a joint employer if it has the authority to exercise direct or indirect control over essential conditions of employment, regardless of whether it actually exercises control. How might this have a massive effect on the transportation industry, and when can we expect a final rule?
Transportation Brief: Spotlight on The Scopelitis Workplace & Data Privacy Practice
Chip Andrewscavage , Andrew J. Butcher , Dylan C. Goetsch , Alaina C. Hawley , Prasad SharmaThe supply chain industry understands how technology and the accumulation of data have shaped today’s economy. With the proliferation of data collection, governments around the world have created a confusing, contradictory, and patchwork set of laws and regulations targeted at data privacy. The laws often have consequences for businesses that fail to adhere to their complex requirements. To mitigate risk relating to the collection and processing of data in business operations, the Firm’s Workplace Data Privacy Practice provides overviews of the regulatory and legal requirements relating to data privacy and security, risk analyses of conducting business in certain states or countries, review and negotiation of contract provisions relating to data privacy and security, and more. Learn more about how attorneys in this practice work to provide tailored, timely advice to clients.
Transportation Brief: Winter 2023 For the Record
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Transportation Brief: Jury Rejects “Nuclear” Verdict in Truck Accident Case
Andrew F. Marquis , Peter C. MortonIn November 2022, a jury in Detroit, Michigan, entered a complete defense verdict in a motor vehicle accident personal injury case brought by a high-profile plaintiff’s firm, with the Scopelitis Accident Litigation Team on the defense. Read why the Scopelitis Accident Litigation Team thinks that, while nuclear verdicts may be on the rise around the country, there remain signs of reasonableness, particularly in federal court jury pools.
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Scopelitis attorneys are often invited to participate in meetings with transportation industry leaders. Learn more about their trips this quarter.
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