Flat Rate Dispatching

Engine Manufacturers Drop Lawsuit Against CARB; Await EPA Ruling

Citing recent hearings by the Environmental Protection Agency (EPA) addressing the issue, the Truck and Engine Manufacturer’s Association (EMA) has decided to drop its lawsuit against the California Air Resources Board (CARB) over deadlines for emissions requirements. EMA’s lawsuit contended that CARB must allow manufacturers at least four full model years before implementing new low and zero-emission engine standards. “Congress unambiguously mandated the minimum four full model year lead-time requirement in the Clean Air Act for both the U.S. Environmental Protection Agency and CARB,” said EMA in a letter. “EPA has now commenced its review of CARB’s pre-emption waiver request and held a hearing that included discussion of the lead-time issue. As a result, EMA has chosen to withdraw its lawsuit without prejudice.” EMA has stressed that its members are supportive of more strict emissions standards across the nation. In the original lawsuit, EMA President Jed R. Mandel said, “Truck and engine manufacturers are proud that today’s modern engines reduce harmful emissions to near zero levels, and we are committed to building still cleaner products—but CARB must provide manufacturers the minimum four years of lead-time mandated by Congress. We acknowledge that the Clean Air Act gives CARB the authority to establish California-specific emissions standards and regulations; however, in doing so, CARB must follow Congress’s requirements.” Mandel further noted that EMA “was never challenging CARB’s independent right to regulate. At the time we filed, EPA had not yet initiated its review of CARB’s request for a waiver. We are pleased that EPA has now solicited public comment and the review process is underway.” Mandel said he hopes EPA will be quick in its ruling to confirm the lead-time requirement.

FLATRATE DISPATCHING

Wisconsin Owner-Operator Wins Reversal in Employee Misclassification Case

In a decision that is certain to have implications for current litigation surrounding AB5 in California, a U.S. Court of Appeals has ruled that a federal district court mistakenly relied on a trucking company’s contract with an owner-operator in the case of Eric Brant vs. Schneider National Inc.

Brant alleged that he was misclassified as an independent contractor instead of a regular employee eligible for appropriate wages and benefits. Brant further argued that Wisconsin-based Schneider violated Truth-in-Leasing regulations and minimum wage requirements under the Fair Labor Standards Act and Wisconsin laws.

Originally, a Wisconsin court had ruled in favor of Schneider using the contract language as the determining factor. After an appeal by Brant, the U.S. Court of Appeals for the Seventh Circuit, based in Chicago, found fault with the lower court’s ruling and reversed the decision, ultimately siding with Brant, meaning the case must be heard again by the original court. The appellate court said that the lower court should have given more weight to the alleged economic realities of Brant’s relationship with Schneider.

“We reverse and remand for further proceedings,” the appeals court wrote. “The district court erred by giving decisive effect to the terms of Schneider’s contracts. In many areas of the law, the district court’s approach would be sound, but not under the Fair Labor Standards Act (FLSA),” said the court.

“In determining whether a person is an employee under the act, what matters is the economic reality of the working relationship, not necessarily the terms of a written contract. The FLSA is designed to defeat rather than implement contractual arrangements,” concluded the court.

Brant presented a series of claims that he was not treated fairly by Schneider, including saying that he received no pay from the company after hauling five shipments over 3,000 miles.

In addition, even though Schneider originally said that Brant could haul loads for other carriers, they had the right to deny Brant that ability on a case-bycase basis. Because Brant had leased his Freightliner from Schneider any breach of the contract would terminate the lease and he would lose his truck. Many of the loads which Schneider assigned to Brant were “highly undesirable” instead of allowing him to haul more desirable loads for other carriers. When Brant did attempt to haul for other carriers, Schneider required such a large security deposit, he was unable to pay it. Schneider eventually seized Brant’s truck for violating the terms of the operating agreement.

Brant also claimed that Schneider controlled his personal appearance and limited him to driving 70 mph or slower even when the posted speed limit was higher.

“Brant had alleged legally viable claims for relief under the Fair Labor Standards Act, Wisconsin minimum-wage law, Wisconsin law of unjust enrichment and the federal Truth-in-Leasing regulations,” the appeals court wrote..

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