Keep On Trucking

By: Mark Webb

The impending vaccine mandates ordered by the Biden Administration are causing considerable angst throughout virtually all sectors of the economy. It issued Executive Order for contractors and subcontractors for the federal government. And the mandates include an order that Fed-OSHA adopt an Emergency Temporary Standard (ETS) for businesses with more than 100 employees.

As we approach Thanksgiving, it is noteworthy that one sector of the nation’s economy – motor carriers (trucking) – is looking at a particularly eventful month.

In an October 21st letter to the Office of Information and Regulatory Affairs (OIRA), the American Trucking Associations (ATA) stated:

“In fact, should OSHA and the leadership of the federal task force on COVID continue on the paths they are on, the nation’s motor carriers – who exclusively supply 80% of the country and move 70% of all US freight tonnage – could lose up to 37% of their drivers to retirements, attrition to smaller carriers and/or conversion to independent contractor owner-operators.”

OIRA is a statutory part of the Office of Management and Budget within the Executive Office of the President. OIRA is the United States Government’s central authority for the review of Executive Branch regulations.

But this is not the only issue facing the trucking industry. It might be reasonable to assume that efforts by the Biden Administration and the State of California to alleviate highly publicized supply-chain disruptions would take into account the important role motor carriers – particularly independent contractor owner-operators – might play in moving the freight queued up in container ships parked along the West Coast. More to the point at the Ports of Long Beach and Los Angeles.

And yet, neither the White House briefing of October 13th relating to those Ports nor the Executive Order signed by Governor Newsom on October 20th mention the role of freight carriers (as opposed to parcel carriers like UPS or Fed Ex) to alleviate the “supply and distribution chain crisis” as declared by the Governor.

The avoidance may have to do with the third issue facing the trucking industry this month. That is the case of California Trucking Association, Inc., et al., Petitioners v. Rob Bonta, Attorney General of California, et al. (CTA). It is the remaining case asking the United States Supreme Court to hold that the Dynamex decision and AB 5 (Gonzalez), now codified and continuously expanding in the California Labor Code, is preempted by the Federal Aviation Administration Authorization Act (F4A).

The CTA petition has been “distributed for conference” for November 12th. This is the first major step the Court takes to review the petition and determine whether to grant it and hear the case. If certiorari is granted, the Court will provide clarification on whether states can apply the “ABC Test” to motor carriers subject to the F4A.

If the Court denies the petition of the CTA, then Dynamex and AB 5 and their Sacramento hatched progeny apply to motor carriers and, as the CTA notes in its petition, “precludes motor carriers from using independent owner-operators to provide trucking services.”

It is difficult to govern when there is confusion about what is the problem and what is the solution. By mid-December, we may see some clarity on how the vaccine-distribution-AB 5 issues are resolved for this essential critical function to America’s economy. Clarity, however, may not result in liking what we see.

But then, this is only a first draft.


Note: The opinions expressed herein may or may not be those of Workers’ Comp Executive. Mark Webb is a former Arizona insurance regulator, insurance company chief compliance officer, and is an expert in corporate governance, risk and compliance. He is the owner of Prop 23 Advisors.