Transportation Annual Year in Review: 2019
As in recent years, the controversy regarding the legal status of owner-operators and other drivers was a recurring theme in many of the cases decided in 2018, which we review in this year’s edition of the Barclay Damon annual transportation law review. This issue keeps the owners of trucking companies up at night with concerns regarding how to make payroll and cover related expenses. Of course, it also troubles many drivers who are struggling to support their families. And now, legal issues arising out of those concerns are increasingly front and center in various litigation matters. A close reading of the topics summarized here will give one a taste of the different contexts in which the issue bubbles up. Issues of federalism and conflicts between federal and state law are also prevalent in the cases we reviewed this year.
1. Owner-Operator Agreements and Leasing Regulations
Part 376 of Title 49 of the Code of Federal Regulations sets out the rules regarding the relationship between authorized interstate motor carriers and the owner-operators who lease their rigs to the motor carriers. These rules have implications for the scope of liability for motor carriers, the employment status of the owner-operators, and the rights of the owner-operators to be protected from contracts of adhesion. Because of that last topic, the regulations are often referred to as the Truth in Leasing regulations.
Mervyn v. Atlas Van Lines, 882 F.3d 680 (7th Cir.), involved an owner-operator (Mervyn) who had leased his rig to Ace World Wide Moving, an agent of the well-known household goods mover, Atlas. Some four years into the lease, Mervyn filed suit against Atlas and Ace, alleging breach of contract and violations of the truth-in-leasing regulations. The regulations require leases to be in writing and to contain various provisions, including one setting out the amount to be paid to the owner-operator for equipment and driver’s services, which may be expressed as a percentage of gross reserve, a flat rate per mile, or by any other mutually agreed method.
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