(Transport Topics)—Giving voice to its small and family-owned carriers, the Louisiana Motor Transport Association has joined a lawsuit filed by a local trucking company against the U.S. Department of Labor over changes to the classification of independent contractors.
“Independent contractors are an integral part of the transportation industry, specifically trucking. Without independent contractors hauling products across the United States, it would completely break an already fragile supply chain,” Renee Amar, LMTA executive director, explained to Transport Topics. “We sincerely hope that the courts hear our case and understand that this is a complete overreach of the federal government. The relationship that trucking companies have with independent contractors is a trusted model that protects everyone.”
Founded in 1939, LMTA represents trucking and related industry companies throughout the state and nation. Its members include a variety of motor carriers: regulated and exempt, intrastate and interstate, and for-hire and private carriers.
The original legal action was filed Feb. 8 in U.S. District Court’s Eastern District of Louisiana in New Orleans by the Liberty Justice Center and the Pelican Institute for Public Policy on behalf of Frisard’s Transportation, owned by LMTA Board Chairman Cully Frisard.
The defendants are the Department of Labor, Julie Su in her official capacity as acting labor secretary, Jessica Looman, in her official role as administrator of the Wage and Hour Division, and the DOL’s Wage and Hour Division.
The lawsuit stems from a Jan. 10 final rule (effective March 11) by the DOL and its Wage and Hour Division that provided a new interpretation of the classification distinction between employees and independent contractors.
“The 2024 rule risks turning independent contractors into unwilling employees, threatening their freedom and livelihood. This one-size-fits-all approach undermines the essence of entrepreneurship opportunity, putting Cully’s American dream in jeopardy,” said James Baehr, special counsel at the Pelican Institute’s Center for Justice.
American Trucking Associations reacted swiftly to the new rule. “It’s unfortunate that the [Biden] administration has chosen to replace a clear and straightforward standard with a tangled mess that weakens our supply chain and undermines the livelihoods of hundreds of thousands of truckers across the country,” declared its president, Chris Spear. “I can think of nothing more un-American than for the government to extinguish the freedom of individuals to choose work arrangements that suit their needs and fulfill their ambitions. More than 350,000 truckers choose to work as independent contractors because of the economic opportunity it creates and the flexibility it provides, enabling them to run their own business and choose their own hours and routes.”
Amar said the new rule would be devastating to many Louisiana truckers, small and big, family-owned and multigenerational companies alike. “The model for trucking companies may not look the same in other industries but for many decades, many trucking companies have operated with some type of independent contractor business model,” she added.
Based in Gramercy, Frisard’s Transportation was founded in 2014 as a family-owned trucking company specializing in transporting cargo and finished goods to stock supermarket and retailer shelves. It relies on independent contracting labor as a core necessity of its business.
The legal complaint noted that Frisard’s Transportation has gross sales of more than $500,000 per year, frequently hauls goods across state lines and often contracts with more than 30 independent owner-operator contractors “who own their own trucks, decide which loads to carry or not, and who are paid a flat percentage of the shipping fee for a given load, plus reimbursable expenses such as fuel, which are passed on to the client.” The complaint says this business model benefits the plaintiff by offering greater efficiency and lower excess costs as well as the contractors, who assume more responsibility for their own business operations but gain autonomy and can obtain greater profits from their work.
“By contrast, a related but separate company, Frisard’s Trucking Co., employs a staff of in-house drivers who drive company-owned trucks, are typically paid on a salary or hourly wage basis, provided a benefits package, and are required to work set hours and carry loads as assigned,” the lawsuit stated.
The legal action accuses the federal government of threatening “to upend plaintiff’s business operations, increasing costs, depriving truckers of the opportunity to operate independently within their own business, and potentially driving many of the contractors plaintiff relies on out of business, or into different lines of business than plaintiff’s, depriving plaintiff of needed manpower to deliver cargo wherever their clients need it delivered.”
Frisard issued a statement that the new DOL rule forces people to “fit the same job description [and] ignores the different goals and skills that independent contractors bring to the table — and, ultimately, it ignores what makes the trucking industry successful. To me, these drivers are part of the family. I’m committed to fighting for their right to keep the flexibility and control over their work that they’re seeking as independent contractors, and I’m proud that the Liberty Justice Center and Pelican Institute are standing up for workers in this fight.”
Frisard was recognized as a 2021 Transport Topics Frontline Hero.
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