['Contingent Workforce', 'Operating Authority']
['Owner-operator', 'For-Hire Carrier Authority']
07/26/2024
Copyright 2024 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.
...
Commodity Carriers, Inc. vs. Federal Motor Carrier Safety Administration, United States Court of Appeals, District of Columbia Circuit, Case No. 04-1286, Decided January 20, 2006
Decision: The Federal Motor Carrier Administration (FMCSA) is applying the regulations correctly when it expects a carrier to collect and retain supporting documents from owner-operators operating under the carrier’s authority.
Background: This case is actually a follow-up to the ruling of an Administrative Law Judge and the Federal Highway Administration’s Program Manager for Motor Carrier and Highway Safety entitled “In the Matter of Commodity Carriers” decided on May 27, 1999. The carrier underwent a compliance review in 1997, and the Administrative Law Judge at that time ruled that the carrier was responsible for the compliance of owner-operators, including the submission of supporting documents by owner-operators. The carrier did not agree and appealed the ruling. That appeal went to the FHWA Program Manager for Motor Carrier and Highway Safety.
The Program Manager ruled with the Administrative Law Judge stating that a carrier is clearly responsible for the compliance of owner-operators operating under a carrier’s authority. The Program Manager stated that the argument used by the carrier pertaining to the retention of toll receipts by owner-operators was nothing more than a “red herring” intended to draw attention away from noncompliance of the carrier’s owner-operators.
The carrier then underwent a follow-up compliance review in November 2000. This review discovered many of the same violations. The FMCSA cited the carrier for failing to obtain and retain supporting documents for all employees. In particular it noted that the carrier’s owner-operators, who are considered employees under the regulations, had not submitted toll receipts.
The result of this compliance review was the carrier’s safety rating being lowered to “conditional.” After exhausting all appeal avenues within the FMCSA, the carrier filed in court to have the rating changed.
The carrier claimed that the FMCSA had failed to engage in rulemaking pertaining to the use of toll receipts as supporting documents. The carrier also claimed the FMCSA had not gone through the appropriate rulemaking process before mandating that owner-operators maintain toll receipts and other supporting documents for the carrier they are operating for.
Opinion: The court ruled that the FMCSA was correct. The court’s ruling was based on the supporting documents regulation and the associated practices and interpretations, which were known to the industry and in particular this carrier. The court also ruled that the carrier is responsible for the retention of supporting documents of an owner-operator based on and the definition of an “employee” provided in the FMCSA regulation.
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['Contingent Workforce', 'Operating Authority']
['Owner-operator', 'For-Hire Carrier Authority']
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