CHALLENGES MOUNT REGARDING OWNER-OPERATOR LEGAL STATUS
The general view in trucking for years has been that federal law allows employees to unionize, but not contractor owner-operators. That assumption now is under increasing scrutiny recent months, thanks in part to the IRS, the National Labor Relations Board, the California Legislature and the Teamsters union.
The American Trucking Associations has begun publishing an Owner-Operator Classification Alert, a monthly report on initiatives that affect the classification of owner-operators as employees or contractors.
On Nov. 8, the National Labor Relations Board affirmed its Sept. 21 staff decision that FedEx Ground drivers at two Wilmington, Mass., terminals were employees and not contractors.
Drivers at those Wilmington terminals voted 24-8 for Teamsters Local 25 in Boston to act as their bargaining representative. FedEx Ground has filed a challenge to that election with the NLRB over “objectionable conduct that made a fair election impossible,” says FedEx Ground spokes-man Perry Colosimo.
FedEx Ground also is defending its contractor classifications against lawsuits filed by owner-operators in Indiana and California, Colosimo says.
Since 1988, the NLRB has ruled seven times that FedEx Ground and FedEx Home Delivery drivers are not independent contractors, according to a Teamsters statement.
Twice in the past two years, California’s Democrat-controlled legislature passed a bill that would allow port owner-operators collective bargaining rights if they were one-truck operations. Gov. Arnold Schwarzenegger, a Republican, vetoed both bills.
The Georgia Court of Appeals recently ruled that the driver-employee of an independent contractor leased to a carrier counts as an employee of the carrier for workers’ compensation purposes, according to a Georgia Motor Trucking Association publication.
The ATA reported in November that the Internal Revenue Service had withdrawn an attempt to reclassify owner-operators as employees at one Virginia fleet. The IRS had argued that payment per mile – common for owner-operators throughout the industry – indicated the carrier’s control of owner-operators’ routes.
FedEx has no plans to change the status of the 15,000 FedEx Ground owner-operators or the 1,200 FedEx Custom Critical owner-operators, Colosimo says. FedEx Ground created a new senior vice president position last March to oversee contractor relations, he says.
– JILL DUNN
NATSO OPPOSING NEW HIGHWAY TOLLS
NATSO, which represents the nation’s truck stop operators, opposes new tolls on highways and bridges, whether added to new or to existing lanes, its board has decided.
NATSO opposes tolls even if the new fees are for purposes of creating new roads and bridges. Tolls are double taxation for truckers, who already pay 40 percent of highway users’ fees, the organization says.
Also, toll construction and maintenance cost far more than the current federal fuel tax system can provide, NATSO says.
The association supports the continued use of federal fuel taxes as the main source of highway funding. “The highway user fees that have been deposited into the Highway Trust Fund provide a fair, user-pays system for funding highway construction,” NATSO says.
The association backs increases in federal fuel taxes, but only if imposed for the sole purpose of funding roadway and bridge maintenance and construction. It also wants government officials to focus highway funding on freight corridors.
– JILL DUNN
OOIDA, PUBLIC CITIZEN GIVE SUPPORT TO HOT FUEL LAWSUIT
The Owner-Operator Independent Drivers’ Association and Public Citizen announced their support of a class-action lawsuit that alleges fuel retailers unfairly price gas and diesel via insufficient control of fuel volume fluctuations under temperature changes.
The complaint says the imbalance costs retail fuel buyers an estimated $2 billion a year. The suit was filed in a federal court in California against fuel retailers including Ambest, Flying J, Petro, Pilot and TA. The suit was filed on behalf of residents, including some owner-operators, in seven states – Arizona, California, Florida, New Jersey, North Carolina, Texas and Virginia.
The standard temperature at which a gallon of motor fuel is determined was set at 60 degrees in an agreement between the oil industry and regulators nearly a century ago. At higher temperatures, volume expands, so fuel sold at higher temperatures in effect cheats the buyer, argues OOIDA.
John Siebert, OOIDA project manager, calls the issue “one of the best-kept secrets that big oil already knew about.” Siebert was partly responsible for bringing the issue to light, as reported by Kansas City Star investigative reporter Steve Everly, after he began responding to member queries about why their fuel efficiency suffered so much in the summer.
“In Canada, the industry makes more money by adjusting” the pumps, wrote Early in his widely circulated report. “In the United States, the industry makes more money by not adjusting.”
The American Petroleum Institute’s John Bisney estimates the cost of retrofitting a pump with temperature-controlled devices at $2,000 a pump, and pump replacements at $25,000, which costs he says will be passed on to the consumer. “It could be done, but in the end it’s not cost-effective,” he says.
The U.S. standard temperature at which a gallon of motor fuel is determined was set at 60 degrees in an agreement between the oil industry and regulators nearly a century ago. At 60 degrees, a gallon of gas is measured at 261 cubic inches in volume. So if a person fuels up on a day when it’s 90 degrees outside, chances are the fuel is hotter than 60 degrees and the volume of the gallon is more than 261 cubic inches. The suit alleges that person, therefore, is getting cheated out of the difference.
– Todd Dills
DOCTOR ENVISIONS CLINIC NETWORK
Catering to truckers only, Professional Drivers Medical Depot hopes to open dozens of clinics at truck stops nationwide in the next five years.
The company, based in Knoxville, Tenn., is seeking permits to operate at 10 Petro Stopping Centers and seven Sapp Bros. locations, says Dr. John McElligott, PDMD chief executive officer. “We’re a medical depot because we’re not open to the public,” McElligott says.
The first clinic was scheduled to open Dec. 15 at the Petro on Watt Road in Knoxville, working with a network of physicians from nearby Parkwest Medical Center, McElligott says. A second clinic will open in March at Sapp Bros. in Peru, Ill., he says.
PDMD launched its effort by providing 6,000 free flu shots to truckers recently at the Watt Road Petro. McElligott also is asking all truckers to take a 48-question survey about medical needs and services at the PDMD website.
The clinics will offer minor medical treatment and federally mandated physicals but also will refer truckers to other medical service providers.
Patients will come to the depots on their own accord or through fleets that contract with PDMD, McElligott says. Ten fleets already have signed up, he says, including Purdy Bros. Trucking of Loudon, Tenn.
Other truck-stop clinic attempts have failed, including chains such as Artel Medical Centers. “Doctors failed who relied on insurance companies,” McElligott says. PDMD will not work with insurers, but prices will be kept as low as possible, he says. A patient not associated with a contracting fleet is likely to pay $55 out of pocket for an office visit, he says.
– JILL DUNN
2006 INSTALLATIONS OVERLAP TO 2007
Market experts say thousands of 2006 engines are being put into trucks in early 2007.
Most of those trucks are already attached to customers who placed orders weeks or even months ago, though some new trucks with ’06 power might be available on dealer lots, manufacturers say.
Engines built from Jan. 1 onward must meet stringent new EPA emissions guidelines, but 2006 engines may be placed in ’07 trucks as long as they are available.
Class 8 inventories were expected to end 2006 at about 65,000 units, which is historically large but not out of line relative to current sales rates, said Kenny Vieth of A.C.T. Research in November.
“Presently, the new Class 8 inventory is equivalent to about two months of supply at the present strong rate of sales,” he said. Strong new-truck sales also mean a lot of trades are on the market, which should act as a check on used truck prices.
September ended with 52,000 trucks on dealer lots, said Chris Brady, president of Commercial Motor Vehicle Consulting. “Fifty-two thousand is a lot anytime,” Brady said, but that backlog is quickly decreasing.
The supply of trucks is only part of the good news for truckers, Brady said. The economy also is brighter than during the previous pre-buy before October 2002, the last time new diesel emissions standards were implemented, Brady said.
This time, “There’s a large supply of trucks, and you can find what you are looking for.” Brady said. “You couldn’t afford to pre-buy last time because of the recession.
– JILL DUNN
AS EXPECTED, TRUCK PLANTS CUTTING JOBS
Truck manufacturers are laying off factory employees in anticipation of an industry-wide decline in demand for heavy-duty vehicles that meet the new federal emissions standards that took effect Jan. 1.
Freightliner has sent notices to 800 employees at its Sterling plant in St. Thomas, Ontario. “We anticipate further reductions of up to 3,200 workers in the first few months of 2007,” said Chris Patterson, Freightliner president and chief executive officer.
Volvo’s New River Valley Plant in Dublin, Va., which makes Volvo and Mack trucks, announced plans to cut about 1,000 positions during the first quarter of 2007.
In addition, about 600 employees at Volvo’s powertrain facility in Hagerstown, Md., will lose their jobs during the first half of this year; and about 450 positions are being eliminated at Mack’s Macungie, Pa., truck plant.
International Truck and Engine was scheduled to lay off 600 employees at its Chatham, Ontario, heavy-truck plant Dec. 4, said International spokesman Roy Wiley. Three hundred layoffs will follow at International’s Springfield, Ohio, medium-truck plant Jan. 3, Wiley said.
In a letter dated Nov. 27, Larry Vessels, manager of Paccar’s Peterbilt plant in Madison, Tenn., informed state officials that the company expected to cut more than 500 positions by early February.
Paccar also will cut the least senior positions at its Kenworth plant in Renton, Wash., the Seattle Post-Intelligencer reported Nov. 30. Union leaders told the paper about 360 people would lose their jobs as of Jan. 3.
– JILL DUNN
OHIO’S SMOKING BAN AFFECTS TRUCKS, TOO
A new law prohibiting workplace smoking in Ohio applies to bars, restaurants, truck stops and apparently even the cabs of owner-operator big rigs, but the Ohio Trucking Association is hoping for a less restrictive application.
According to the state’s unofficial tally, 58 percent of Ohio voters approved State Issue Five Nov. 7. The constitutional amendment prohibits almost all workplace smoking and bars it in most public places as well.
The trucking community didn’t realize that Issue Five smoking restrictions apply to company-owned vehicles and possibly even to owner-operator vehicles, said Larry Davis, president of the Ohio Trucking Association. If the owner-operator is registered as a business and lists himself as an employee, then he could be barred from smoking in his own truck, Davis said.
“Owners of trucking companies are upset,” Davis said. “We have a hard enough time finding qualified drivers.”
Constitutional amendments such as Issue Four can be clarified by legislation, though such clarifications are open to court challenges. Several legislators are willing to take on the issue in the spring, Davis said.
The new law states that any workplace smoking must be outside where smoke cannot get in through a door or window. Employers must remove all ashtrays and prominently post “No smoking” signs with a phone number where violations can be reported.
The signs probably would have to be on commercial trucks as well, said Jay Carey, public affairs director for the Ohio Department of Health. He added, however, that enforcement will be “complaint-driven,” and no member of the public is likely to complain about a trucker smoking in a one-person workplace.
The ban took effect Dec. 7, even though the Health Department has until June 7 to write the enforcement rules, Carey said.
The first violation is punishable by a written warning, the second by a civil fine of $100 to $2,500.
– JILL DUNN
JUDGES QUESTION FMCSA’S NUMBERS IN HOURS RULE
An attorney representing the Federal Motor Carrier Safety Administration found himself on Dec. 4 defending the statistics the agency relied on in its latest rewrite of the hours of service rule.
Matthew Colette, a U.S. Justice Department lawyer, also faced questions from a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit regarding the impact of the rules. Colette told the judges the number of hours spent driving is less important than the level of daily fatigue.
Judge Merrick Garland questioned Colette on the methodology of FMCSA’s analysis and was unsatisfied by his responses. “You’re not a statistician,” Garland chided.
Colette said, “Where we are statistically is within the realm of reasonableness.”
Reasonable isn’t enough, Garland responded, saying the analysis also had to be fairly transparent. The appeals court has declared numerous times, Garland said, that the court can’t evaluate a model that the agency hasn’t sufficiently explained.
Chief Judge Douglas Ginsburg noted that the FMCSA analysis doesn’t break down the components of its projected regulatory impact. He asked, “How do the petitioners know it’s a sound number?
