The Transportation Brief®
A quarterly newsletter of legal news for the clients and friends of Scopelitis, Garvin, Light, Hanson & Feary
Spring 2021 | Vol. 28, No. 2

10 W. Market St, Ste. 1400
Indianapolis, IN 46204

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.

Scopelitis attorneys on the latest transportation industry news and trends.

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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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10 W. Market St, Ste. 1400
Indianapolis, IN 46204

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.

The Transportation Brief®
A quarterly newsletter of legal news for the clients and friends of Scopelitis, Garvin, Light, Hanson & Feary
Spring 2021 | Vol. 28, No. 2

10 W. Market St, Ste. 1400
Indianapolis, IN 46204

The PRO Act – Dropping Barriers for Unions

In a sea of legislation threatening business interests, the Protecting the Right to Organize Act (PRO Act or Act) stands out as particularly harsh, making it easier for unions to represent workers. This is at the expense of the minimal protections the National Labor Relations Act (NLRA) currently affords employers and makes it exceedingly expensive when labor law violations are found. With the recent Amazon vote to reject union representation typifying a longer-term trend among workers, Democrats in Congress seek to re-write the rules according to what many have characterized as a union’s wish list.

The NLRA protects an employee’s right to join a union and engage in other concerted activities. The PRO Act would significantly expand the universe of trucking industry workers entitled to that protection, implementing, for the first time in a federal statute, the restrictive version of the ABC test with its problematic B prong. Regardless of union organizing status, the Act would make worker misclassification a stand-alone violation, subject to monetary penalties. The statute would also prohibit pre-dispute arbitration agreements with class waivers, and it would nullify the Right-to-Work laws of 27 states, forcing all workers in a shop represented by a union to become union members.

With respect to organizing, the Act contains several provisions designed to speed up the election process, reduce an employer’s ability to communicate with its employees, and bypass the election process altogether. Importantly, the Act prohibits an employer from hiring permanent strike replacements when workers walk off the job. What is more, the Act contains newly-imposed, debilitating penalties on violations. The deck would be stacked in favor of the unions.

The House has already passed the PRO Act, but its future in the Senate is uncertain because it is highly unlikely to garner the 60 votes needed to survive a filibuster. The discussion has therefore turned to including the Act in budget legislation, which can be enacted through special budget reconciliation rules requiring only 50 votes. This approach may not be feasible because those rules require that the budgetary effect of the legislation cannot be merely incidental to the non-budgetary policy change. Additionally, there are currently only 47 Democratic senators who have expressed their support for the Senate version of the PRO Act, so obtaining 50 votes may still be problematic – a problem that would exist even if the filibuster rules were changed. The PRO Act should nevertheless be monitored closely, because some of its provisions may be implemented by the NLRB through policy and case law decisions when Democratic members become the majority later this fall.

Spotlight on STC’s Leadership Transition

Scopelitis Transportation Consulting (STC) announced that P. Sean Garney and Steve Keppler will lead the organization as co-directors during its next chapter. Garney and Keppler will work with STC President and CEO Emeritus Dave Osiecki to develop a strategic next steps plan for STC as Osiecki transitions into retirement in late 2021.

Garney previously served as vice president of STC. Keppler, who most recently served as vice president of member services at the Intermodal Association of North America (IANA), joins STC on June 1, 2021. Combined, Keppler and Garney will offer STC’s clients nearly 50 years of experience in trucking and transportation. While continuing to assist STC clients on issues related to carrier safety, government relations, and education and training, STC will now tap into a new set of skills, contacts, and experiences that Keppler brings to STC, including enforcement, intermodal operations, and technology among others.

“Scopelitis Law Firm started our subsidiary STC when Firm clients expressed that the industry had a need not only for the Firm’s legal counsel but for consultants who could help in other parts of their business. And what STC has seen in the five years since its inception is that the demand is more than out there,” said Scopelitis, Gavin, Light, Hanson & Feary President and Managing Partner Greg Feary. “As STC enters this exciting next phase of its evolution, the experience that Dave, Sean, and Steve have means STC has one of the deepest benches of any transportation consulting team in the country.”

Prior to joining STC, Garney worked for NIC Federal, the government contractor that operates FMCSA’s pre-employment screening program. He has served as an industry expert on topics ranging from Hours of Service, Electronic Logging Devices, and the FMCSA’s Compliance, Safety and Accountability program. Keppler started his 29-year transportation career with the FMCSA serving in various regulatory, research and policy development positions. As part of his work at IANA, he handled marketing, policy initiatives, and safety and compliance matters.

To learn more about STC, its team, service offerings, and STC insights on the latest transportation industry news and trends visit www.scopelitisconsulting.com.

What Will It Take to Return to The Office?

The prospect of a return to in-person work raises a myriad of issues for employers. Aside from the proper timing, employers should begin preparing plans to address: whether vaccinations will be required; whether there will be a ramped-up return or a fixed date for everyone; whether remote work will continue to be an option for some or all employees; how to respond to questions from employees who are reluctant to return or concerned about in-person safety protocols; how to respond to requests for special accommodations due to religion or disability; the level of safety protocols (e.g., masks, distancing, etc.) that will be necessary when everyone returns; and how to monitor and keep up with evolving CDC/OSHA guidance. Finally, employers should also keep an eye on the legislation being presented in many states that would restrict an employer’s ability to require or even inquire about vaccination in certain situations.

Do Your Company’s Internal Safety Policies Increase Exposure to Negligence Claims?

A work atmosphere focused on safety can help reduce exposure from claims and litigation costs. But, can your company’s internal safety policies increase exposure by raising the standard of care? The answer should be a straightforward “no,” namely, internal policies, standing alone, are not enough to definitively establish the standard of care. Most jurisdictions follow some form of this rule. However, after a plaintiff demonstrates a standard of care, certain courts may admit internal policies, and compliance therewith, as relevant to the question of negligence. As such, your company’s internal policies can pose a potential risk before a jury. One way to combat this risk is by anticipating the plaintiff’s argument early in litigation and adopting an aggressive defense strategy that minimizes the potential exposure, or even bars the claim all together.

Navigating PPP Loans in a Business Sale

One potentially thorny issue that frequently arises in the COVID-pandemic era is the treatment of Payroll Protection Program (PPP) loans in the context of a transaction involving the purchase or sale of a company. According to Small Business Administration guidance, the PPP loan borrower remains responsible for all loan-related obligations. As a result, the PPP loan borrower must notify the PPP-loan lender of a potential change in ownership of the borrower and provide certain documentation relating to the transaction for the lender’s review. In addition, the outstanding PPP loan balance must be escrowed as part of the transaction through receipt of loan forgiveness and repayment to the funding lender. However, where the PPP loan has already been repaid or is forgiven prior to the transaction’s closing, all such notice requirements and restrictions on the change of ownership fall to the wayside.

Export Air Cargo Rules Changing in July

On July 1, 2021, the rules governing cargo offered for international air transportation will undergo a significant change. The distinction between cargo moving on passenger aircraft and cargo moving on all-cargo aircraft will be eliminated, such that comparable security measures must be applied to all cargo regardless of the type of aircraft. The upshot is that cargo tendered to all-cargo aircraft will now need to be screened. The Transportation Security Administration is in the process of developing amendments to security programs used by Indirect Air Carriers and Certified Cargo Screening Facilities to reflect this change. In addition, the agency is exploring the establishment of an “alternative framework” to screening and options for cargo that cannot be screened using existing technologies. In the meantime, IACs and CCSFs should make plans for the screening of export cargo moving on all-cargo aircraft.

Independent Contractor Developments

Shannon M. Cohen, Gregory M. Feary, Jeffrey S. Jackson, Prasad Sharma, Ryan W. Wright, ATA Trucking Legal Forum – Washington, D.C.

July 25, 2021 | Washington D.C.
Arbitration Issues

Jul 25, 2021, Braden K. Core, Prasad Sharma, ATA Trucking Legal Forum – Washington, D.C.

July 25, 2021 | Washington D.C.
2021 Case Law Update

Steven A. Pletcher, National Association of Professional Employer Organization’s Virtual PEO Capital Summit

May 19, 2021
Independent Contractor Developments

May 15, 2021, Shannon M. Cohen, Gregory M. Feary, American Trucking Associations’ Mid-Year Management Session – San Antonio, TX

May 15, 2021 | San Antonio, TX
DOT Regulatory Update

May 12, 2021, Timothy W. Wiseman, Indiana Motor Truck Association’s Annual Meeting – Indianapolis, IN

May 12, 2021 | Indianapolis, IN
  • We are pleased to announce that Chase Bullock and Dylan Goetsch have joined the Firm’s Chicago office. Mr. Bullock’s practice is primarily devoted to the Class Action Practice Group, while Mr. Goetsch’s practice will concentrate on Commercial Litigation.
  • Jeff Jackson reports the pandemic-fueled surge in online sales has created hectic conditions inside many e-commerce distribution centers. This has resulted in an increased demand for hostler and trailer spotting services, which can be high liability operations. When agreeing to provide these types of services for customers, transportation providers should be careful to negotiate fair and reasonable contract terms – being especially sure to closely review indemnification and insurance requirements.
  • Greg Feary reports, as expected, the US Department of Labor rescinded the independent contractor test rule that was set to take effect on March 8. The withdrawal was officially effective on May 6, but the rule had not yet taken effect. The US DOL has not signaled notice of proposed rulemaking on a new IC test but is likely to reach back and issue guidance memos on the interpretation of the existing IC test similar to those issued during the Obama era.