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By Cecile Entleitner, Associate, Blakey & Agnew
For many Americans the Labor Day holiday is associated with the unofficial end of summer, a three-day weekend filled with cookouts and sales shopping, and the start of football season. The holiday is also known to be one of the busiest travel times of the year, with over 17 million people expected to travel by plane and many millions more predicted to travel by car or other modes of transportation.
However, the origin of Labor Day dates back to the labor movement of the late 19th century which aimed to unify trade union workers and reduce work hours. According to the U.S. Department of Labor, the holiday now serves as "a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country." Of course, labor disputes are not just an issue of the past. In recent years lawsuits as well as legislation have attempted to make changes to labor laws across several industries, including the transportation industry.
One recurring issue the transportation workforce has grappled with is worker classification. Especially in the commercial trucking industry where drivers are often classified as independent contractors rather than employees. While some drivers prefer the increased flexibility and autonomy the independent contractor model offers, others would prefer an employee classification so they may qualify for additional benefits.
Classification disputes have been the subject of several lawsuits, most notably the Dynamex Operations West Inc. vs. Superior Court case. In 2018, the California Supreme Court issued a ruling in this case establishing new, more stringent classification criteria which made it harder to classify workers as independent contractors in the state. Organizations such as the California Trucking Association and the Western States Trucking Association have filed suits seeking to overturn the Dynamex decision. In their suits they argued the ruling conflicts with the Federal Aviation Administration Authorization Act of 1994, which prohibits states from enacting laws that affect a motor carrier's prices, routes and services. They also alleged that the decision violated the Commerce Clause of the U.S. Constitution, which states that Congress has the authority to regulate commerce. Both these cases are still ongoing.
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Favoring the opposite side of the classification debate, the National Labor Relations Board (NLRB) issued a ruling in January 2019 on a dispute between an airport shuttle-van service and its drivers. NLRB, an independent federal agency, ruled that the franchisee drivers were independent contractors, not employees. The decision cited "entrepreneurial opportunity" as one of the key criteria in determining classification. Some industry experts believe this ruling could make it easier for carriers to classify their drivers as independent contractors.
A bill to codify the Dynamex ruling into state law is currently under consideration by the California Legislature. Many other states, including New Jersey, Texas, Ohio, and Washington, have also introduced legislation to clarify or change provisions relating to worker classification.
On the federal level, the New Economy Works to Guarantee Independence and Growth (NEW GIG) Act was introduced in both the House and the Senate this year. The bill would establish the following classification criteria intended to demonstrate the independence of the worker: the relationship between parties; the location of the services or the means by which services are provided; and specific requirements in a written contract. The bill would create a safe harbor for those who meet the criteria and would classify them as independent contractors for income and employment tax purposes.
As Congress returns from their summer recess this month and courts across the country as well as federal agencies ramp up their fall proceedings, we may see movement on some of the labor-related issues involving the transportation industry.
Blakey & Agnew, LLC is a public affairs and
communications consulting firm based in
Washington, DC.
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