Administration Rolls Back Regulations

This week, the Secretaries of Transportation and Labor each announced the withdrawal of rulemakings and policy statements from the Obama Administration. On Monday, June 5, 2017, the Department of Transportation announced that it was withdrawing the 2014 Advanced Notice of Proposed Rulemaking (ANPRM) that sought to increase minimum insurance levels for motor carriers. Then, on Wednesday, June 7, 2017, new Secretary of Labor Alex Acosta announced that the Department of Labor would withdraw the previous Administrator’s Opinions on joint employment of independent contractors.

The 2014 ANPRM on motor carrier financial responsibility considered the potential for increasing the minimum insurance for commercial motor vehicles from $750,000 to potentially more than $4 million per power unit. The Department of Transportation received over 2,100 comments were received on the ANPRM, of which over 1,900 provided substantive reasoning either in favor of, or opposing, an increase. Despite the significant response, the Agency concluded that it was unable to collect sufficient data or information to support moving forward with a rulemaking on the issue. Increases in motor carrier insurance could have placed tremendous pressures on the owner-operator and independent driver community, as well as large fleets that have economies of scale, and could potentially have created a significant capacity shortage in the marketplace.

The Department of Labor joint employer standard is a major concern to all companies that work either with a franchising business model, or with independent contractors and owner-operators. Secretary Acosta’s withdrawal of the Administrator Opinions on joint employment does not change the legal responsibilities of employers under current labor law, however it does provide a clearer picture of how the Wage and Hour Division of the new Department of Labor will enforce that law. Despite this reversal, the joint employment standard as set out by the National Labor Relations Board (an independent agency) can still be applied to businesses. That standard was established in a 2015 decision that found Browning-Ferris Industries to be a joint employer, and significantly muddied what was previously a bright-line test for joint employment responsibility. It is expected that Trump Administration nominees to fill open seats on the National Labor Relations Board, as well as the Republican-controlled Congress, will take steps to roll back the impacts of the Browning Ferris decision in coming months.