Regulatory Outlook for the New Administration

That elections have consequences is generally accepted, but agreement on what those consequences will be for trucking outside of DOT is less universal.

It is anticipated that much of the Biden administration’s early focus will be on undoing the regulatory (often deregulatory) actions of the Trump administration. For example, rulemakings initiated by the Trump administration will be frozen in place and re-evaluated, portending an ominous fate for the recent DOL rule on independent contractors under the FLSA (if not otherwise voted down under the expedited procedures of the Congressional Review Act). The new administration may also seek change through litigation. For reference, roughly half of the Trump administration’s environmental regulatory actions are mired in lawsuits. The Biden administration’s Department of Justice may elect to no longer defend those suits or agree to settlements that result in new rulemakings. The DOL’s rule on joint employer status is an example of similarly situated labor regulation.

For his affirmative agenda, President Biden has been clear he favors a broad definition of employment and a stronger union presence. While the FLSA’s text and precedent may prevent the Biden administration from implementing the ABC test broadly through regulation, there may be more flexibility through an executive order applicable to government contracts. The administration could issue sub-regulatory guidance on worker misclassification and step-up enforcement that could prove challenging for trucking (for example, withdrawing a recently- issued, favorable Wage and Hour Division (WHD) opinion letter discussed on page 4). On the NLRB front, the Board will consist of a Republican majority until Aug. 27, 2021 (the expiration of a Republican member’s term), however, the inauguration-day firing of the Republican general counsel (whose term otherwise would not expire until Nov. 16, 2021) indicates the Biden administration intends to move aggressively within the existing constraints of the NLRB and may push for reversal of more recent employer-friendly decisions.

Climate change and environmental issues will receive immediate attention. Although the initial focus is anticipated to be on measures related to clean power and emissions from cars and light trucks, EPA may accelerate the Cleaner Trucks Initiative to reduce NOx emissions from heavy duty trucks.

Even with control of the Senate, enacting legislation will likely require some bipartisan support. As an alternative to eliminating the filibuster, Democrats may turn to special budget reconciliation procedures to pass taxing and spending measures, but even then, the 50-50 split in the Senate and narrowed majority in the House will require all Democrats (including centrists) to get on board. As a result, the regulatory agenda is likely where the consequences of the recent election will be most felt at the outset.

Spotlight on Expansion of Scopelitis’ Milwaukee Office

Scopelitis has an established national practice in transportation law, including robust accident and workers’ compensation defense practices in its Indianapolis, Chicago, Detroit, Dallas/Fort Worth, and Milwaukee offices. The Firm represents insurance carriers and self-insureds alike in protecting the employer’s interest when personal injury and/or property damage claims arise and in paying only the appropriate benefits in workers’ compensation claims.

The Firm recently announced the addition of four attorneys to its Milwaukee office who bring extensive experience in transportation law – one in accident litigation and the others in workers’ compensation defense.

“We need to be as sharp at defending accident and workers’ compensation claims as we are at guiding executive teams through issues critical to their companies’ strategic growth,” said Scopelitis President and Managing Partner Greg Feary. “Our newest attorneys will help us stay sharp in areas of existing strength,” Feary said.

Thomas Gonzalez joins the Firm’s accident defense team. Gonzalez brings 20 years of experience in representing motor carriers, brokers, and shippers in all areas of litigation.

Mary Beth Hughes, Michael McFarlane, and Margaret Krei have more than 30 years of collective experience in workers’ compensation defense. They counsel employers on a variety of issues, including: independent contractor status; designing and executing creative strategies to prevent litigation and reduce costs; investigating injuries; employment decisions; and negotiating global settlements to help employers proactively protect against claims not covered under the Workers’ Compensation Act.

Scopelitis Partners Jay Starrett and Steve Stanaszak were instrumental in bringing the four new attorneys to the Milwaukee office. “I’ve had the pleasure of working with these attorneys on cases for a number of years,” Starrett said. “Their understanding of how their issues affect both short- and long-term outcomes of business affairs for motor carriers will serve their clients well,” Starrett said. “And their eagerness to jump in and work with our national team of transportation attorneys make them a perfect fit for Scopelitis.”

Canadian ELD Mandate

On June 12, 2021, CMV drivers operating in Canada required to keep records of duty status will be required to have a certified ELD solution. To be considered a certified ELD solution, an ELD must satisfactorily undergo third-party testing by an accredited testing body approved by Transport Canada, in partnership with the Standards Council of Canada. Currently, there are no certified Canadian ELD solutions available to Canadian or U.S. based motor carriers and there is only one accredited third-party testing entity.

With an estimated testing time of 4-6 weeks, the first approved Canadian ELD will not likely become available to motor carriers for purchase until March of 2021. If Transport Canada is unwilling to consider a soft enforcement period of 6-12 months, motor carriers with U.S. compliant ELD solutions could be forced into Canadian non-compliance, costly breach of contract allegations, or halting cross-border operations altogether.\

Scopelitis is actively engaging industry stakeholders as well as Transport Canada to advocate for a soft enforcement period in order to avoid the difficult choices discussed above for carriers with cross-border operations.

Shipping Contract Language Can Impact Broker Liability

The Wisconsin Court of Appeals issued an opinion in the case of Rogers v. Great West Casualty Co., highlighting how contract language can increase liability exposure for cargo and property brokers when there is insufficient insurance coverage. In this case, the motor carrier’s insurer had already tendered its limits of coverage. Plaintiffs sued the broker, and the court found issues of fact as to whether the broker was acting as a motor carrier and may have been liable for the accident as a statutory employer under federal law. In the shipping contract, the broker affirmed it was a licensed motor carrier and that all trucks would meet certain specifications. The court held that these provisions in the shipping contact assured the shipper that the broker would haul the load and may have been relied upon by the trier of fact to conclude that the broker was liable as a motor carrier. The court explained that if the broker has reserved the right to broker the load, the shipper would have been on notice that another entity could be involved. The decision reinforces the importance of scrutinizing contract language.

Coronavirus Paid Leave Expires (Mostly)

Congress passed the Families First Coronavirus Response Act (FFCRA) in March, 2020, providing paid employee leave up to 12 weeks for coronavirus-related circumstances. The FFCRA by its terms expired December 31, 2020. Just prior to its expiration, Congress debated an FFCRA extension but ultimately settled only on allowing employer tax credits to extend through March 31, 2021. As such, employers are no longer required to provide paid FFCRA leave. Employers, however, may voluntarily provide paid leave through the first quarter of 2021 and receive an immediate payroll tax credit.

Employers should nevertheless carefully evaluate their leave obligations. State and local laws may contain paid leave provisions. In addition, employers should be mindful of potential obligations to provide unpaid leave under the Family and Medical Leave Act or as a reasonable accommodation under the Americans with Disabilities Act.

A Bumpy Road for Arbitration Under the Biden Administration?

With a new administration taking control of the Presidency and Congress (via the Vice President’s ability to break ties in the Senate), there may be renewed focus on efforts to curtail the use of mandatory arbitration agreements. On the legislative front, there may be bills that prohibit mandatory pre-dispute arbitration agreements or make it an “unfair labor practice” for employers to enter into agreements with class waivers. Democrats’ ability to pass such legislation is doubtful given the likelihood of a filibuster. As a result, federal agencies may turn to rulemakings that prohibit class waivers for specific types of claims, as they did during the Obama administration. Such efforts would have to withstand scrutiny under the Supreme Court’s decision in Epic Systems. Motor carriers, whose arbitration agreements are often deemed exempt from the Federal Arbitration Act, should still be able to rely on state arbitration laws for enforcement, although they will need to monitor the preemptive effect of developments at the federal level.

May My Company Require COVID-19 Vaccinations?

When considering the coronavirus vaccinations in the U.S., employers should carefully evaluate their approach to employee vaccination. The EEOC has historically advised employers to encourage, but not require, vaccinations to avoid liability under the ADA or Title VII of the Civil Rights Act of 1964. Employers who choose to require vaccinations as a condition of returning to the workplace must comply with those laws in evaluating exemption requests from employees who object on medical or disability-related grounds or based on a sincerely-held religious belief. In those circumstances, employers may be required to engage in the interactive process and offer reasonable accommodations, which may include the requirement to wear a mask at all times, moving the employee to a different position, or additional testing and screening.