On Monday, November 30, 2015, the Federal Motor Carrier Safety Administration (FMCSA) published a long-anticipated rule regarding Prohibiting Coercion of Commercial Motor Vehicle Drivers (the “Driver Coercion Rule”). The new rule prohibits carriers, shippers, receivers or intermediaries from “coercing” drivers to operate commercial motor vehicles (CMVs) under circumstances that would violate certain provisions of the Federal Motor Carrier Safety Regulations (FMCSRs) and the Hazardous Materials Regulations (HMRs). The rule also prohibits entities that operate CMVs (typically motor carriers) from coercing drivers to violate certain commercial regulations. Here are some of the highlights from the final Driver Coercion Rule:
- At a high level, the final rule prohibits “coercion” – any threat to withhold business or to take adverse employment action against a driver for refusing to operate a CMV under conditions that would require the driver to violate certain federal regulations. “Coercion” also includes the actual withholding of business or the actual taking or permitting of an adverse action to punish a driver for his or her refusal.
- The prohibitions of the rule apply not only to covered motor carriers, shippers, receivers and intermediaries, but also to their respective “agents, officers, or representatives.”
- The rule covers both successful and “failed” coercion – in other words, the act of coercion is complete whenever an attempt to coerce is made, regardless of whether the attempt is successful.
- A driver will have 90 days after an event to file a complaint of coercion with FMCSA, and FMCSA will investigate any “non-frivolous” complaint that sets forth certain required information.
- Violations of the Driver Coercion Rule may result in civil penalties of up to $16,000 per offense. When applicable, an entity that engages in coercion may also have its operating authority revoked.
The rule is authorized by the Moving Ahead for Progress in the 21st Century Act (MAP-21) and the Motor Carrier Safety Act of 1984. Covered entities will need to review the rule quickly – it goes into effect on January 29, 2016.
Why Is the Driver Coercion Rule Necessary?
According to FMCSA, the Driver Coercion Rule addresses concerns that certain parties in the logistics chain have been applying economic pressure to coerce drivers of CMVs into operating under conditions that violate federal regulations. For example, drivers have argued that motor carriers, shippers, receivers, or intermediaries such as tour guides and brokers sometimes insist on schedules that cannot be met without violating the hours-of-service limitations that are imposed on drivers of CMVs. Drivers also might be pressured to operate CMVs with mechanical deficiencies or to disregard the hazardous materials regulations. According to FMCSA, when drivers refuse to carry loads under these conditions, they are sometimes threatened with loss of a job, reduced pay, fewer loads or less desirable trip assignments. The new rule is intended to stop these kinds of coercive practices.
What Constitutes “Coercion” under the Driver Coercion Rule?
The definition of coercion in the final version of the Driver Coercion Rule reflects a significant improvement from the rule as first proposed in May 2014. Under the previous version, an entity could have been liable for coercion if it requested a driver to operate a CMV under circumstances that the entity “knew or should have known” would require the driver to violate the regulations. This appeared to suggest that shippers, receivers or brokers were being burdened with an obligation to inquire whether any transportation request would require a driver to violate a regulation (e.g., the driver’s hours-of-service limits). The final rule improves substantially on this prior version by revising the definition of “coercion” to place an affirmative obligation on drivers to state that a request will require them to violate a regulation and to identify “at least generally” the regulation that will be violated. In short, there is no “coercion” under the final Driver Coercion Rule until three things happen: (1) A request is made by a carrier, shipper, receiver or intermediary; (2) a driver affirmatively states that fulfilling the request would result in a regulatory violation; and (3) a threat or adverse action is taken against the driver based on the driver’s refusal.
None of Us Want Coercion – But Will the Driver Coercion Rule Have Broader Implications?
Although the definition of “coercion” is substantially improved in the Driver Coercion Rule, questions remain for carriers, shippers, receivers and intermediaries who may be subject to the rule. Until FMCSA provides greater clarity through its enforcement of the new provisions, here are a few issues worth watching:
Look Out for “Failed Coercion” Claims
The final version of the rule provides little clarity regarding the kinds of actions or communications following a driver’s refusal that will subject a covered entity to penalties. For example, on the one hand, FMCSA states in its responses to the public comments that a shipper does not “coerce” a driver who refuses a load by offering the refused load to a different driver or by calling a carrier to request a different driver – the shipper is simply helping to ensure that no regulatory violation occurs and finding an available driver to accept the shipment. But what if a driver alleges that he was punished for his refusal of one load by being denied access to a shipper’s best trips for future loads or by being offered fewer trips in the future? Because drivers remain responsible for regulatory violations (regardless of whether those violations are coerced), it is possible that we will see more of this kind of “failed coercion” claim involving allegations that a driver refused a request because of a regulatory obligation and then was denied work opportunities or subjected to an adverse action as punishment for the refusal.
A Different Kind of Spotlight on Driver-Related Communications
Inevitably, the Driver Coercion Rule places a brighter spotlight on any communications with drivers throughout the supply chain. This could have a few different effects across the industry. Shippers, receivers and intermediaries may become less likely to address issues on the spot with drivers to avoid any risk that comments will be perceived as express or “implied” coercion. According to FMCSA, once a driver refuses a request, “further discussion of his or her response and related issues might or might not cross the line into coercion,” but whether that line is crossed will “depend on the substance of the conversation and the existence of a threat, explicit or implied, to make the driver pay an economic price …” See 80 FR 74701. Because FMCSA must investigate any “non-frivolous” complaint, shippers and brokers might choose to avoid the headache altogether and call the carrier who provided the driver rather than work things out directly with drivers. In addition to creating some inefficiency, this might strain relationships between carriers, on the one hand, and shippers and brokers, on the other. There will be a new premium on knowing that a driver can meet the requirements for a shipment before the driver is dispatched to the shipper, and this in turn means that the shipper will need to have this information to provide the carrier.
What Should Covered Entities Do to Manage the New Enforcement Risk?
Covered entities should make sure that personnel in frequent contact with drivers (e.g., loading or receiving dock personnel) are trained on how to respond when a driver indicates that a particular request will require them to violate a regulation. This should include consideration of how interactions with drivers should be documented and what kinds of communications are permitted. For example, in an information sheet published with the new rule, FMCSA recommends that drivers provide any written exchange, including text messages and emails, reflecting an alleged request to violate a regulation. At a minimum, personnel in frequent contact with drivers should be trained on how different kinds of communications may be perceived. This kind of treatment could be particularly important for entities dealing with food, hazardous materials, or any other shipment requiring special handling that inevitably necessitates more communications with drivers about the specific transport requirements.
It remains to be seen whether the Driver Coercion Rule will encourage new coercion claims or create significant enforcement risk. Covered entities should ensure that they have appropriate policies and procedures in place for managing communications with drivers, and personnel should be trained on how circumstances might be evaluated by FMCSA. There is no doubt that many front-line personnel know how to zealously follow up to make sure that a shipment meets customer requirements. But will they know when that customer care becomes coercion?
The transportation industry team at McGuireWoods has extensive experience advising clients in the trucking industry regarding regulatory and litigation matters. We can assist companies who are threatened with potential litigation or regulatory enforcement and we can provide counsel about how to mitigate such threats.