Independent Contractor Counseling

Many transportation companies rely heavily upon the use of independent contractors, including owner-operators, couriers, motor carriers, and freight sales agents (collectively, ICs). Some transportation companies exclusively rely on ICs to furnish the equipment and labor needed to complete the transportation and delivery services they arrange. Fully understanding the use of independent contractors requires:

  • Deep knowledge of the operational use of such service providers
  • Familiarity with common industry practices in all segments of the transportation industry
  • Understanding the application of a myriad of laws, both statutory and case law, at both the federal and state level

Although the use of ICs may be a cost-effective means of remaining competitive, Scopelitis clients must consider numerous legal ramifications in the regulatory and unique operational context of the transportation industry. The Firm has experience counseling individual clients and the industry at large on matters involving the use of ICs, including:

  • Protecting Independent Contractor Status: Our attorneys have considerable experience in assisting clients in protecting the independent contractor status of the ICs they engage.
    • Statutory Exemptions: Scopelitis attorneys have worked with countless industry stakeholders on drafting legislation aimed at protecting IC status for purposes of state workers’ compensation, unemployment tax, and wage and hour laws. And multiple states have adopted such legislation. These laws have significantly reduced the uncertainty that previously surrounded the proper classification of “owner-operators”.
    • On-Site and Remote Audits of Independent Contractor Programs: Because the financial ramifications of reclassification can be so significant, transportation companies regularly retain the Firm to conduct on-site and/or remote audits of their IC programs. Our attorneys (1) review the client’s contracts, leases, qualification documents, policies, website, and daily interactions with ICs and (2) draw on our industry-specific knowledge and experience to recommend modifications aimed at lowering the client’s profile as a misclassification litigation target and reducing the potential liability exposure in the event of such a claim.
    • Defending Litigation and Regulatory Audits Challenging Independent Contractor Status: Scopelitis attorneys actively defend efforts by adversaries—i.e., regulatory agencies and the plaintiffs’ bar—to reclassify ICs as employees for purposes of various state and federal laws. The Firm’s Independent Contractor Counseling team collaborates with the Investigations and Audits team as well as the Class Action Defense and Complex Litigation team in defense of audits/investigations launched by regulatory agencies (e.g., the IRS, U.S. DOL, and state unemployment tax departments as well as workers’ compensation agencies and insurers) into the classification of ICs as independent contractors, as well as class and collective action litigation alleging violations of state and federal wage and hour laws due to the purported misclassification of ICs.  
  • Due Diligence Projects: The Firm’s Independent Contractor Counseling practice often collaborates with the Mergers and Acquisitions team on due diligence projects. While we primarily use these skill sets on buyer-side projects, our experience in these areas also aids sellers in understanding their strengths and weaknesses as they prepare for sale.
  • Designing or Reviewing Insurance Programs for ICs: The structure of insurance programs designed to facilitate various types of insurance coverages, including auto liability, occupational accident, physical damage, and non-trucking liability insurance coverage for ICs continues to pose complex issues that challenge the trucking industry. Scopelitis attorneys have been involved in the design of insurance programs that afford ICs the opportunity to secure such coverages. Our attorneys also author nationally-published materials to assist the trucking industry in understanding and analyzing insurance requirements and coverages relating to the use of ICs.
  • Federal Leasing Regulation Compliance: The Federal Leasing Regulations (FLRs) govern certain aspects of the business relationship between a motor carrier and owner-operator. Noncompliance with the FLRs can result in enforcement action and, more frequently, can form the basis of class action litigation that comes with costly damages and fees. Scopelitis attorneys regularly counsel clients on achieving compliance with the FLRs to reduce the likelihood of drawing such claims.

Independent Contractor Counseling

Many transportation companies rely heavily upon the use of independent contractors, including owner-operators, couriers, motor carriers, and freight sales agents (collectively, ICs). Some transportation companies exclusively rely on ICs to furnish the equipment and labor needed to complete the transportation and delivery services they arrange. Fully understanding the use of independent contractors requires:

  • Deep knowledge of the operational use of such service providers
  • Familiarity with common industry practices in all segments of the transportation industry
  • Understanding the application of a myriad of laws, both statutory and case law, at both the federal and state level

Although the use of ICs may be a cost-effective means of remaining competitive, Scopelitis clients must consider numerous legal ramifications in the regulatory and unique operational context of the transportation industry. The Firm has experience counseling individual clients and the industry at large on matters involving the use of ICs, including:

  • Protecting Independent Contractor Status: Our attorneys have considerable experience in assisting clients in protecting the independent contractor status of the ICs they engage.
    • Statutory Exemptions: Scopelitis attorneys have worked with countless industry stakeholders on drafting legislation aimed at protecting IC status for purposes of state workers’ compensation, unemployment tax, and wage and hour laws. And multiple states have adopted such legislation. These laws have significantly reduced the uncertainty that previously surrounded the proper classification of “owner-operators”.
    • On-Site and Remote Audits of Independent Contractor Programs: Because the financial ramifications of reclassification can be so significant, transportation companies regularly retain the Firm to conduct on-site and/or remote audits of their IC programs. Our attorneys (1) review the client’s contracts, leases, qualification documents, policies, website, and daily interactions with ICs and (2) draw on our industry-specific knowledge and experience to recommend modifications aimed at lowering the client’s profile as a misclassification litigation target and reducing the potential liability exposure in the event of such a claim.
    • Defending Litigation and Regulatory Audits Challenging Independent Contractor Status: Scopelitis attorneys actively defend efforts by adversaries—i.e., regulatory agencies and the plaintiffs’ bar—to reclassify ICs as employees for purposes of various state and federal laws. The Firm’s Independent Contractor Counseling team collaborates with the Investigations and Audits team as well as the Class Action Defense and Complex Litigation team in defense of audits/investigations launched by regulatory agencies (e.g., the IRS, U.S. DOL, and state unemployment tax departments as well as workers’ compensation agencies and insurers) into the classification of ICs as independent contractors, as well as class and collective action litigation alleging violations of state and federal wage and hour laws due to the purported misclassification of ICs.  
  • Due Diligence Projects: The Firm’s Independent Contractor Counseling practice often collaborates with the Mergers and Acquisitions team on due diligence projects. While we primarily use these skill sets on buyer-side projects, our experience in these areas also aids sellers in understanding their strengths and weaknesses as they prepare for sale.
  • Designing or Reviewing Insurance Programs for ICs: The structure of insurance programs designed to facilitate various types of insurance coverages, including auto liability, occupational accident, physical damage, and non-trucking liability insurance coverage for ICs continues to pose complex issues that challenge the trucking industry. Scopelitis attorneys have been involved in the design of insurance programs that afford ICs the opportunity to secure such coverages. Our attorneys also author nationally-published materials to assist the trucking industry in understanding and analyzing insurance requirements and coverages relating to the use of ICs.
  • Federal Leasing Regulation Compliance: The Federal Leasing Regulations (FLRs) govern certain aspects of the business relationship between a motor carrier and owner-operator. Noncompliance with the FLRs can result in enforcement action and, more frequently, can form the basis of class action litigation that comes with costly damages and fees. Scopelitis attorneys regularly counsel clients on achieving compliance with the FLRs to reduce the likelihood of drawing such claims.

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