As discussed on this blog, late last year the Federal Motor Carrier Safety Administration ("FMCSA") determined that California's Meal and Rest Break rules are pre-empted by federal law, as applied to property-carrying commercial motor vehicle drivers covered by the FMCSA's Hours of Service regulations. Less than five months later, the implications of this are being seen in court.
As discussed previously on this blog, the transportation market is rapidly evolving both in terms of the laws governing it and in the nature of the business itself. Now, FedEx is looking to bring the next innovation along as it announced plans for last-minute robot delivery for companies such as Pizza Hut and Walmart.
In California, the ongoing litigation around the definition of an employee versus independent contractor and the rules for meal and rest breaks threaten to upend the trucking industry. While these issues are understandably garnering significant attention, there are others across the country that could also have a large impact. Currently, a case in Arkansas may leave the industry forced to undergo massive change.
In a recent Federal Arbitration Act ("FAA") decision, the United States Supreme Court unanimously made getting to arbitration more difficult for trucking companies. In Oliveira v. New Prime, the Supreme Court determined that it was for a court, not an arbitrator, to decide if the exemption in Section 1 of the FAA applies. More importantly for truckers, the Court decided that the Section 1 exemption applied to all truck drivers, whether employees or independent contractors. This means the FAA cannot be used to compel arbitration of claims involving truck drivers.
As discussed previously on this blog, recent legal developments have complicated the business plans of trucking companies that use independent contractors as drivers. These have included the Dynamex decision that changed the 30-year-old test of whether a worker is an employee or an independent contractor, but appears applicable only in certain circumstances and for only certain legal claims. This was followed by lawsuits to invalidate Dynamex and a federal district court decision finding that Dynamex was pre-empted by federal law. Compounding this confusion, California passed a law late last year that exposed large retailers to new potential liability. The bill, SB 1402, meant companies could be jointly liable when they hire companies that have violated state employment laws. Now shippers could be liable for violations caused by the motor carriers they hire.
As discussed previously on this blog, the Dynamex Operations West v. Superior Court decision upended California's independent contractor market with a new test for whether a worker will be considered an employee. The new test was particularly problematic for the trucking industry. As such, several cases have arisen to challenge the Dynamex decision. The Western States Trucking Association (WTSA) challenged the case. Additionally, a recent California District Court decision determined federal law pre-empts Dynamex. Of course, there is a still a long way to go before Dynamex's fate is decided.
Backed by many in the trucking industry, the Environmental Protection Agency is planning to implement new limits on commercial truck emissions. The new limits appear to be in response to California pushing ahead with laws of its own.
Manbang, China's "Uber-for-Trucks" is securing funds to support expansion of its driverless program, and the company has already invested in a Silicon Valley driverless truck start-up. While the company is still establishing itself in China, it's success or failure could be a signal for similar companies in the United States.
Governor Jerry Brown recently signed SB 1402, which quickly has shippers, particularly larger retailers, facing new levels of potential liability. The bill means retailers will now be held jointly liable when the trucking companies they hire for port drayage services violate state employment laws.