Transportation Brief: Spotlight on Investigations and Audits

Kelli M. Block, Braden K. Core, Gregory M. Feary, A. Jack Finklea, James H. Hanson, Christopher C. McNatt Jr., Steven A. Pletcher, David D. Robinson, Nathaniel G. Saylor, Rebecca S. Trenner

August 25, 2021

While the transportation industry is largely deregulated, a surprising number of federal, state, and local government agencies write and administer a long—and growing—list of rules affecting transportation providers. These agencies regularly inspect for noncompliance, and they have the power to assess civil penalties for violations, place assets “out of service,” or worse.

When the inspectors come calling, it is important to be prepared.

The Firm’s multi-disciplinary Investigations and Audits practice combines a deep knowledge of the regulations impacting transportation providers with experience helping clients navigate the complex web of agencies and enforcement regimes.

Scopelitis can defend your business in a wide range of investigations: Federal Motor Carrier Safety Administration compliance reviews and safety audits; Transportation Security Administration and Federal Aviation Administration inspections concerning air-cargo security and dangerous-goods compliance; Environmental Protection Agency investigations involving violations of California’s Truck and Bus Regulation and Drayage Truck Regulation; Department of Labor wage-and-hour audits; Occupational Safety and Health Administration inspections; Equal Employment Opportunity Commission investigations; and state unemployment audits.

In addition, the Firm regularly defends clients facing investigations beyond those conducted by government agencies, including “premium audits” conducted by insurers, “pension fund” audits for unionized workforces, and “contract audits” conducted by shippers (e.g., for compliance and most-favored-nation clauses).

The Firm’s multi-disciplinary Investigations and Audit practice assists Mergers and Acquisitions partners for due diligence projects. While we primarily employ these skill sets on buyer-side projects, our experience in these areas aids sellers in understanding their strengths and weaknesses as they prepare for sale.

The Firm’s Investigations and Audits team - Greg Feary, Braden Core, Nathaniel Saylor, Chris McNatt, Kelli Block, Jim Hanson, David Robinson, Jack Finklea, Steve Pletcher, and Becky Trenner - can guide you through the regulatory inspection and enforcement process. 

• Transportation Brief: Labor Meets Transportation in Surface Transportation Reauthorization Bills
  by Gregory M. Feary , Prasad Sharma
  
  Congress is making progress, albeit in fits and starts, towards passing a multiyear surface transportation reauthorization bill. Both versions of these massive bills not only authorize highway spending, but also contain numerous policy-related provisions aimed at trucking. While the future of the legislation and the final provisions are uncertain, now is a good time to look at what may be coming down the road.
• Transportation Brief: Ninth Circuit Addresses Piece-rate Pay Plans
  by James H. Hanson , E. Ashley Paynter
  
  In Ayala v. U.S. Xpress, Inc., the Ninth Circuit recently ruled that a properly drafted piece-rate compensation pay plan that pays for delivered loads can cover both the time spent driving as well as the time spent performing non-driving activities associated with delivering the loads. How can companies address how drivers earn their activity-based pay?
• Transportation Brief: Collections During COVID and Beyond – Protecting Your Warehouse
  by Kevin  M. Phillips , Michael  D. Reed
  
  During the height of the pandemic, businesses, including warehouses, were presented with a new world of challenges. One such challenge present before and during the pandemic is collections. The good news is that warehouses can take certain actions to be better positioned to handle this age-old problem. 
• Transportation Brief: Questions Remain After Change in Export Air Cargo Rules
  by Tyler  P. Biddle , Braden K. Core , Nathaniel G. Saylor
  
  In the Spring 2021 edition of The Transportation Brief, we advised on an upcoming change to the rules governing cargo offered for international air transportation. The new rule, effective June 30, 2021, requires all cargo to be screened or handled pursuant to an “alternative framework.” This has caused significant disruption in the supply chain as shippers, air forwarders, and all-cargo aircraft operators attempt to navigate new compliance obligations.  Read more about these difficulties and how to stay ahead of the curve.
• Transportation Brief: New Texas Law Paving the Way to Curbing Nuclear Verdicts
  by Renea E. Hooper , Peter C. Morton
  
  With “runaway” jury verdicts in trucking accident cases on the rise in recent years, a new law may give trucking companies some relief in one major venue.
• On the Road
  Scopelitis attorneys are often invited to participate in meetings with transportation industry leaders. Learn more about their trips this quarter.
• Dispatches
  Transportation Industry News & Trends