Motor Carrier Regulations

Illinois House Bill 5101 prohibits texting or using a hand-held cell phone while driving a commercial motor vehicle - making it a serious traffic violation.  Illinois previously prohibited texting while driving for all vehicles, but cell phones were permitted.  Illinois statutes have since been amended to be in compliance with the Motor Carrier Safety Regulations law that prohibits texting and cell phone use by commercial motor vehicle drivers.

Senate Bill 2488 also prohibits cell phone use in construction or maintenance speed zones regardless of the speed limit in those zones.  Drivers can only use cell phones in voice-operated mode, which includes the use of a headset or cell phones used with single button activation.

Recently, the Federal Motor Carrier Safety Administration ("FMCSA") released its 2012-2016 strategic plan, which lays out the agency's safety-focused initiatives over the next five years. The strategic plan is built around a three-pronged approach to truck and bus safety: raise the barrier to entry to the industry; enforce high safety standards; and eliminate high-risk carriers and drivers.

Among other things, the agency plans to development a smartphone application called the "SaferBus App" in order to assist consumers in selecting a particular carrier. Additionally, the FMCSA hopes to increase accessibility to its data management system. The FMCSA plans to complete rulemaking revisions to the Safety Fitness Procedures, in accordance with the CSA. Through this rulemaking FMCSA would establish safety fitness determinations based on safety data from crashes, inspections, and violation history rather than the old compliance review. The intention is to permit the FMCSA to assess the safety performance of a greater segment of the motor carrier industry with the hope of reducing large truck and bus crashes, injuries, and fatalities. The FMCSA will also work on rulemaking revisions to the Electronic On-Board Recorders for Hours of Service Drivers to require motor carriers to install and operate Electronic On-Board Recorders (EOBRs).

Further, the FMCSA will create a single comprehensive safety ranking system that covers all regulated carriers (ie, passenger, HAZMAT property, and HHG carriers, as well as shippers, including intermodal freight, brokers, drivers, and cargo tank manufacturers or repair facilities.)  The Agency hopes to expand CSA and the number of carriers with SMS BASIC scores.

 The FMCSA's strategic plan is available at http://www.fmcsa.dot.gov/about/what-we-do/Strategic-Plan/Strategic-Plan.aspx.

On April 25, 2012, the Equal Employment Opportunity Commission (“EEOC”) issued important new guidance impacting the way employers use criminal arrest and conviction records of prospective employees to make hiring decisions.  Motor carriers (including last-mile carriers, household goods carriers, and couriers) dealing directly with homeowners, residents, and retail consumers are quite often required by their retailer customers to perform criminal background checks.  Although the EEOC’s guidance applies to “employers” as opposed to contractors of owner/operators, caution and attention are warranted.  Employers seeking to avoid liability for claims of discrimination under the disparate impact and disparate treatment prohibitions contained in Title VII are advised to evaluate their application and hiring policies to ensure compliance with the EEOC’s new guidance.

Under the EEOC’s new guidance, an employer’s (e.g. motor carrier) blanket policy or practice of excluding applicants with criminal records from employment may violate Title VII to the extent the policy strays far from Federal Motor Carrier Safety Regulations and the commercial motor vehicle driver disqualifications listed at 49 U.S.C. § 31310.  Instead, the EEOC now requires narrowly-tailored individualized assessments, or “targeted screens,” of applicants that consider the nature of the crime, the time elapsed since the arrest or conviction, and the specific responsibilities of the job for which the applicant is applying. 

With the new guidance in place, employers should expect the EEOC to step up its investigative and enforcement efforts, particularly to the extent blanket criminal background policies raise the “pattern or practice” flags most noticeable to the EEOC.  Motor carriers that “employ” drivers and helpers to conduct in-home deliveries should therefore evaluate their application and hiring policies related to the use of criminal arrest and conviction records to ensure narrow tailoring and individualized assessments in light of the new EEOC guidance.  Even contractor-model motor carriers should use reasonable efforts to avoid overly-broad screening of owner/operators.  For additional information on the new EEOC guidance, or to discuss implementing a policy that minimizes your company’s exposure on a claim of discrimination in its hiring practices, contact Greg Feary, Jim Hanson, David Robinson, or Jack Finklea in the Firm’s Indianapolis office at (317) 637-1777.
 

Late Friday, a South Carolina federal Court struck down the National Labor Relations Board's recently-promulgated employee rights notice-posting regulation.  The regulation, set to go into effect April 30, 2012, requires employers, including motor carriers and other transportation companies, to post a notice informing employees of their rights to engage in union and other protected, concerted activity.  The Court recognized that the NLRB had only the authority granted to it by Congress and that the NLRB exceeded that authority.  The Court's ruling contradicts last month's finding by a D.C. federal Court that Congress in fact granted broad power to the NLRB, which included power to require the proposed notice-posting.  The NLRB has not yet commented on the ruling, nor has it formally suspended the April 30 effective date of the regulation.  We will continue to monitor the matter as the proposed implementation date approaches.   

The Federal Motor Carrier Safety Administration ("FMCSA") announced planned improvements to the implemented in December 2010 as part of the agency’s Compliance, Safety, Accountability initiative. A preview is currently available to motor carriers and law enforcement. During this data preview period, FMCSA requests comments on the possible impact of the changes.  To comment, go to www.regulations.gov; the docket number is FMCSA 2012-0074. The changes will be available to the public in July 2012.

FMCSA says the SMS improvements are based on ongoing analysis and feedback from enforcement personnel, the motor carrier industry and other stakeholders, and are designed to more effectively identify and prioritize high-risk and other unsafe motor carriers for enforcement interventions designed to reduce commercial motor vehicle crashes and hazardous materials incidents.

 FMCSA will provide motor carriers with the ability to preview how the improvements impact their individual safety data in SMS. These improvements include:
• Changes to the SMS methodology that identify higher-risk carriers while addressing industry biases;
• Better applications of SMS results for agency interventions by more accurately identifying safety-sensitive carriers – such as carriers transporting people and carriers hauling hazardous materials – so that such firms can be selected for CSA interventions at more stringent levels; and
• More specific fact-based displays of SMS results on the SMS Website.

A putative class action brought by former drivers against Performance Food Group, Inc. ("PFG") was dismissed with prejudice by a California federal judge.  The court held that the meal and rest break claims were preempted by the Federal Aviation Administration Authorization Act ("FAAA"), enacted in 1994 to preempt state trucking regulation and bars state laws related to the prices, routes or services of federally regulated motor carriers.  The dismissed class action is the second in several months, after a California federal court granted Penske Logistics LLC's motion for partial summary judgment, holding that the FAAAA trumped meal and rest break claims from a class of appliance delivery drivers and installers. In the PFG order, the court stated that the reasoning in Dilts v. Penske was persuasive.

 

On December 27, 2011, the Federal Motor Carrier Safety Administration published the final rule regarding the revised hours of service ("HOS") regulations.  FMCSA's new HOS final rule reduces by 12 hours the maximum number of hours a truck driver can work within a week. Under the old rule, truck drivers could work on average up to 82 hours within a seven-day period. The new HOS final rule limits a driver's work week to 70 hours.

In addition, truck drivers cannot drive after working eight hours without first taking a break of at least 30 minutes. Drivers can take the 30-minute break whenever they need rest during the eight-hour window.

The final rule retains the current 11-hour daily driving limit. FMCSA will continue to conduct data analysis and research to further examine any risks associated with the 11 hours of driving time.

The rule requires truck drivers who maximize their weekly work hours to take at least two nights' rest when their 24-hour body clock demands sleep the most - from 1:00 a.m. to 5:00 a.m. This rest requirement is part of the rule's "34-hour restart" provision that allows drivers to restart the clock on their work week by taking at least 34 consecutive hours off-duty. The final rule allows drivers to use the restart provision only once during a seven-day period.

Companies and drivers that commit egregious violations of the rule could face the maximum penalties for each offense. Trucking companies that allow drivers to exceed the 11-hour driving limit by 3 or more hours could be fined $11,000 per offense, and the drivers themselves could face civil penalties of up to $2,750 for each offense.

The effective date of the final rule is February 27, 2011.  Commercial truck drivers and companies must comply with the HOS final rule by July 1, 2013. The rule is available on FMCSA's Web site at http://www.fmcsa.dot.gov/HOSFinalRule.

Effective January 3, 2012, the Federal Motor Carrier Safety Regulations (“FMCSR”) prohibited commercial drivers from using hand-held mobile phones while operating a commercial truck or bus. Violations of the rule can result in fines of up to $2,750 to drivers and $11,000 to motor carriers.  Habitually offending drivers of this new rule can be disqualified from operating a CMV. This ban can also create additional hurdles for accident liability claims.   

Motor carriers should act quickly to ensure compliance.  To assist with this process, the Firm has prepared sample notices for both employee and independent contractor drivers.  Both of the these form are available to our clients for a flat fee of $200.  The forms achieve the goals of providing ample notice to the drivers of this change in the law and memorializing the motor carrier’s commitment to the compliance.  Also, to the extent allowed by law, the employee driver form includes a reimbursement provision for situations where a motor carrier incurs a fine because of the employee driver’s non-compliance. The independent contractor form references the independent contractor agreement indemnity language for situations where a motor carrier incurs a fine because of the independent contractor’s non-compliance.

If you would like to obtain these form, please contact asmith@scopelitis.com.  Upon your request, both of these forms will be emailed to you.   

Scopelitis, Garvin, Light, Hanson & Feary
www.scopelitis.com
(317) 637-1777

On August 1, 2011, the deadline for “large” motor carriers and other trailer fleet owners (those with 21 or more trailers) to seek delayed compliance with the Greenhouse Gas Emission Regulation (“GHG Regulation”) of the California Air Resource Board (“CARB”) passed.  For any large motor carrier that did not seek to file a delayed compliance plan, the GHG Regulation requires, with very few exceptions, that each 2010 model year or older 53 feet or longer trailer operating in California must either be SmartWay Certified or must be retrofitted with fuel saving technologies by January 1, 2013.  The effect of filing a delayed compliance plan was to allow carriers to stagger compliance (e.g., bring 20% of the California fleet into compliance per year until 100% compliance is reached on January 1, 2016), thereby avoiding a 100% compliance obligation on January 1, 2013.

It has come to our attention that a significant number of motor carriers may not have received notice of the passing of the deadline to file delayed compliance plans, or even that the filing of such plans was an option.  The firm is investigating the potential for late-submittal of plans that would provide carriers that did not file with a staggered compliance option so as to avoid a 100% compliance requirement by January 1, 2013.  If your company would be interested in investigating whether such relief is available, please do not hesitate to contact us.  If your company maintains a trailer fleet of 20 or fewer trailers, the deadline for filing a delayed compliance plan is July 1, 2012. We have conferred with the American Trucking Associations, Inc and it has advised the firm it is sending out alerts and working through this issue with its experts to possibly obtain relief on the deadline problem. It concurs with the firm that preparing and submitting a proper filing immediately is a prudent step despite the passage of the deadline.

The Federal Motor Carrier Safety Administration's anticipated pilot program for long-distance trucking across the Mexican border remains on hold.  The Inspector General of the Department of Transportation indicates that the program is close to being ready, but that the FMCSA must first explain how it will conduct certain safety audits of Mexican carriers in Mexico before getting the green light to move forward.  Ultimately, the goal of the program is to test the system devised by the FMCSA to ensure that Mexican trucks are safe and in compliance with U.S. cabotage regulations.  Of course, even once it is green-lighted, the program faces additional opposition - i.e., the Owner-Operator Independent Drivers Association has sued to halt the program, and several congressmen have introduced legislation to limit the program.

As mid-year insurance renewals are finalized, the transportation industry needs to be alerted to certain revisions to the “Notice of Cancellation” provision in the ACORD 25 Certificate of Insurance (“COI”).  The revised ACORD 25 removed long-standing language requiring prior written notice to the certificateholder (often 30 days) of any policy cancellation.  This change has prompted concerns on how certificateholders will be assured they will receive information on the status of cargo coverage.  Also effective March 21, 2011, the FMCSA stopped requiring regulated motor carriers (with the exception of household goods movers and freight forwarders) to file proof of cargo insurance.  Thus, in most common situations, members of the public are no longer able to obtain information regarding the status of a particular motor carrier’s cargo coverage via the FMCSA’s website.

Insurance regulators further recognized that insurance companies may not be able to satisfy the prior written notice requirement in those instances where an insured chooses to immediately cancel an insurance policy.  In this regard, modifying the ACORD 25 cancellation provision and removing the language requiring prior written notice of cancellation was intended to reduce the likelihood that a COI would run afoul of state insurance laws and regulations prohibiting misrepresentations of insurance coverage.

To ease concerns of shippers and others that request a COI, transportation providers may wish to explore various options such as endorsing the underlying policy to include a requirement that the certificateholder receive advance notice of cancellation or including a provision in the shipping agreement confirming that the insured will provide prior notice of cancellation.  Motor carriers confronted with this issue may need to explore these options in order to maintain valuable business relationships and ensure compliance with state insurance laws.  A thorough review of the relevant shipping agreements may also be necessary to ensure that such agreements are consistent with the language contained in the applicable COIs.

The Supreme Court provided good news to transportation companies facing class action litigation today by issuing an opinion in the Wal-Mart v. Dukes case that reverses the Ninth Circuit Court of Appeals' class certification decision.  In a 5 to 4 ruling, the Court held that plaintiffs failed to demonstrate commonality under Rule 23(a)(2), and unanimously held that the back pay claims could not be properly certified under Rule 23(b)(2).  The decision will make it more difficult for plaintiffs to succeed in certifying class actions going forward.

This decision is a victory for any transportation company faced with a class action lawsuit, as the Court's decision ostensibly makes it more difficult for a putative class action to be certified going forward.  This is especially so in employment law class actions in which the plaintiff cannot point to a specific employment practice of the motor carrier or other transportation entity that violates the law, but rather relies on anecdotal evidence to satisfy the rigid requirements of Rule 23.  How this decision will affect other transportation class action cases such as those involving the Truth-in-Leasing Regulations is unknown at this juncture, but without proof of a class wide policy that violates the law the Wal-Mart case makes clear that certification will be difficult to obtain.

In Wal-Mart v. Dukes, the plaintiffs — a group of 1.5 million current and former Wal-Mart employees — claimed that while Wal-Mart had no express corporate policy against the advancement of women, Wal-Mart's decision to give managers discretion to make pay and promotion decisions  itself was a discriminatory policy.  That policy resulted in male employees earning more money than their female counterparts and holding a disproportionate number of leadership positions that could be proven on a class wide basis according to the plaintiffs.  Wal-Mart maintained that the class members’ claims are not similar enough to justify certifying them as a class, as the sheer number of class members and stores, along with variations in positions the plaintiffs held and differences in managers at each location militated against litigating the case on a class wide basis.

The Court agreed.  Focusing on the commonality prong of Rule 23, the Court mentioned that while the purported policy could possibly form the basis of a disparate impact claim under Title VII of the Civil Rights Act of 1964, it does not follow that every potential class member has a common claim as is required to proceed with a class action case.  To prove commonality under Rule 23, the plaintiff must demonstrate that each class member “suffered the same injury” according to the Court, which the plaintiffs could not do because the employment decisions complained of were admittedly left to the discretion of each store manager.  "Respondents wish to sue for millions of employment decisions at once,” Justice Antonin Scalia said. “Without some glue holding together the alleged reasons for those decisions, it will be impossible to say that examination of all the class members’ claims will produce a common answer to the crucial discrimination question.” Prior to this ruling, the commonality requirement of Rule 23 was often glossed over in any class certification analysis.  This decision establishes a roadmap for approaching this issue going forward and indicates a renewed focus on commonality is warranted in any class certification inquiry. 

The Court also held that a claim for monetary relief could not be certified under Rule 23(b)(2) when, as here, the monetary relief sought is not incidental to the requested injunctive or declaratory relief.  Rule 23(b)(2) applies when the party opposing the class has acted or refused to act on grounds that apply generally to the class so that final injunctive or declaratory relief is appropriate for the entire class.  The Court's ruling clarifies that Rule 23(b)(2) certification is only appropriate when a single, indivisible remedy would provide relief to each class member, and that when individualized monetary damages are appropriate such claims “belong in Rule 23(b)(3)”, which is arguably a more difficult certification standard to meet.

Finally, the Supreme Court also rejected plaintiffs' theory that back pay could be determined with a "Trial by Formula" calculation, i.e. that a sample of class members could be selected, and statistical modeling could yield a result for the entire class wide recovery without further individual proceedings. Such a method of calculating damages would violate the Rules Enabling Act according to the Court, as a class cannot be certified on the premise that an employer "will not be entitled to litigate its statutory defenses to individual claims."
With the renewed focus on the commonality prong of Rule 23 and the favorable findings regarding Rule 23(b)(2), the class action landscape is certainly more favorable to employers than before.  And while employers should be pleased with the decision, it does not provide a silver bullet to defeat class certification.  The bar for plaintiffs’ counsel to meet to certify a case however, has certainly been raised. 

The Federal Motor Carrier Safety Administration (FMCSA) has revised the DOT regulations to establish new minimum federal standards for States’ issuance of commercial learner’s permits (CLPs). At the same time, it modified some requirements relating to commercial drivers licenses (CDLs). Among the provisions:

• A CLP holder will have to meet virtually the same requirements as those for a CDL holder, and will be subject to the same driver disqualification penalties.
• States will be required to check FMCSA databases and verify driver social security numbers of CLP applicants (most already do the latter), to recognize each others’ CLPs, and to create a CDLIS (Commercial Driver’s License Information System) record for each CLP issued.
• The CLP is to be issued for 180 days after passage of the general and endorsement knowledge test, and may be renewed for another 180 days without retaking the test.
• A CPL holder must wait at least 14 days to take the CDL skills test.
• A CDL may not be issued for more than 8 years (states may lower that period).
• States will be required to use the FMCSA’s endorsement and restriction codes as licenses are next issued or renewed.
• Testing in languages other than English is prohibited.

Rejecting comments that larger carriers could be unfairly penalized on a proportional or violation-per-driver, the FMCSA added a new ‘‘acute violation’’ to the DOT Safety Ratings process-- knowingly allowing operation of a CMV [Commercial Motor Vehicle] by an employee who does not have a current CLP or CDL with the proper class or endorsements, or in violation of any restriction. To comments regarding availability of information about drivers, the agency replied, “Carriers are in the best position to determine that their own drivers are properly licensed. Implementation of a central database for monitoring and notifying carriers of status changes to CDL holders is beyond the scope of this rulemaking.”

The final rule is effective July 11, 2011, but some of the changes have different effective dates. The FMCSA's release is available at 76 Fed. Reg. 26854 (May 9, 2011).

Two bills winding their way through the Oregon Legislature cover trucking issues that address emissions rules and indemnification.

The House voted 48-11 to advance an amended bill to the Senate that addresses emissions reduction. Intended to crack down on unnecessary idling of trucks, the bill would prohibit commercial vehicles from idling for more than five minutes each hour on property open to the public.

Examples of circumstances that would warrant additional idling are to operate defrosting, heating or air conditioners – or installing equipment necessary to comply with manufacturers’ operating requirements, specifications and warranties, or with federal, state or local safety regulations.

An exception would also be made for air conditioning or heating during a rest or sleep period when the outside temperature is below 50 degrees or above 75 degrees.

The exception would not apply if the truck is equipped with an auxiliary power unit or other idle-reduction technology. It would also be unacceptable to park near a grade school and idle, regardless of temperature.

Another exception to the five-minute rule would be made for idling up to 30 minutes while a truck is waiting to load or unload, as well as actually loading or unloading.

Removed from the bill was a provision to require Oregon’s Environmental Quality Commission to adopt rules and establish requirements that trucks weighing in excess of 26,000 pounds that pull box-type trailers must take steps to reduce greenhouse gas emissions.

Separate rules would have been put in place for local-haul trucks and trailers. The affected haulers are classified as operating within 100 miles of home base. Day-cab trucks would have been required to only use tires with low rolling resistance.

The bill – HB2081 – is awaiting consideration in the Senate Business, Transportation and Economic Development Committee.

Another bill on the move would make unenforceable any motor carrier contracts that provide for shippers to be indemnified for losses caused by their own negligence.

Affected contracts would be defined as any written agreement for the transportation of property for compensation or hire, entry on property to load, unload or transport property, or any service incidental to such activity, including the packing or storage of property.