Lewie Pugh of the Owner-Operator Independent Drivers Association made only a few comments at his House of Representatives committee appearance July 24 about the Biden administration’s independent contractor (IC) rule.
But they were enough to draw a strong rebuke from Chris Spear, president of the American Trucking Associations. Spear took to ATA’s Transport Topics website last week to express his displeasure with OOIDA and the comments by Pugh, who is an executive vice president of OOIDA and increasingly its public face.
In the hearing before the House Transportation and Infrastructure Subcommittee on Highways and Transit, Pugh ripped into various government mandates that are in place, pending or loosely proposed. Speed limiters came in for particularly strong criticism from Pugh, and his opening comments were a broadside against what OOIDA sees as excessive government regulation.
“While compliance rates have never been higher, there are those including large motor carriers, shippers, safety advocates and elected officials along with bureaucrats who not only resist modernizing or eliminating needless regulations, but want to impose even more rules on the American trucker,” Pugh said.
His comments on the Biden administration’s IC rule, which is administered by the Department of Labor, were far more tempered, and he concluded them by saying, “We’re good with the new rule.”
Pugh made a point that many other observers have made: that the Biden IC rule is not significantly different from the Trump administration rule and less stringent than what was first proposed.
There is a key provision in the final Biden IC rule that is somewhat different from the original proposal: the question of whether an independent contractor, in any field, who is mandated by an employer to acquire or use safety or other equipment has fallen under more “control” of the employer. And if control is established, then the worker who is required to buy the safety equipment cannot be seen as an independent contractor.
With Pugh focusing on the issue of speed limiters repeatedly during his presentation, the possibility they will someday be mandated lined up with his views on the Biden IC rule.
“If you’re truly an independent contractor, subleased or whatever to another motor carrier, you shouldn’t be controlled as an employee, meaning speed limiters and driver fleet management tools like that must be put into your truck,” he said.
He noted that under the Trump rule, requiring equipment could be allowed “and you could still be considered independent.” While Pugh did not delve deeply into the change between the proposed Biden IC rule and the final rule, he said the idea that required equipment established control – as was suggested in the proposed rule – is “[done] away with” under the final rule.
Pugh at the hearing was asked about the IC rule by Rep. Robert Menendez, a Democrat who represents New Jersey’s 8th congressional district, which includes the ports of Newark and Elizabeth. Menendez said the rule “will be good for workers. It provides clarity and will help to ensure that workers are not deprived of Fair Labor Standards Act protections like minimum wage.”
But Menendez said “some large corporate motor carriers have claimed that the rule will harm independent truckers and owner-operators that want to work as independent contractors.”
Pugh’s response is that a properly classified worker “will not change if you are in a compliant lease working for a carrier with a lease agreement. You will be just fine like you were prior to the last rule being passed.”
Julie Su comes in for criticism
Spear’s response targets Julie Su, acting U.S. secretary of labor whose nomination has not been able to get full Senate confirmation. The Department of Labor administers the Wage and Hour Division, which is responsible for considering the department’s IC rule in its actions.
Su, coming out of California and its AB5 independent contractor rule, has long been a target for opponents of the Biden IC rule. Spear had her in his sights.
“It’s astonishing … to hear that OOIDA, which purports to represent the interests of independent truckers, has had a change of heart and is now endorsing Su’s disastrous IC rule — her signature policy as acting secretary,” Spear wrote in the perspective piece on the Transport Topics website.
The six-factor test
He said the Biden IC rule replaced a “straightforward two-factor standard with an opaque and deliberately confusing six-factor test.”
However, the six factors to guide the Wage and Hour Division in determining IC status are in both the Biden rule and the Trump rule. Spear’s reference to two factors is likely to reflect the fact that the Trump rule gave particular weight to two of those six factors: the nature and degree of control by the principal, and opportunities for profit and loss. The Biden IC rule put those two at the same level as the other six but added an unspecified “other factors” test for point No. 7.
Without identifying Pugh by name, Spear criticized his comments about being protected from the IC rule if a carrier had a “compliant” lease with a driver. “In other words, if you like your IC plan, you can keep your IC plan,” Spear wrote in a revision of the Obama-era statement about health plans that was ultimately viewed as false. “But like another infamous broken promise from Washington, this will certainly not be the case in practice.”
“OOIDA might feel it won’t change things, but the plaintiffs’ bar and Su’s union handlers most certainly have different plans,” Spear added.
Jeremy Kirkpatrick, ATA’s vice president of public affairs, said in response to queries from FreightWaves that “we feel Mr. Pugh’s response to the question speaks for itself, as does our editorial.”
“If OOIDA doesn’t actually support Su’s rule, they should correct the record publicly,” he wrote in an email. “Otherwise, it seems clear they have gone from opposing Julie Su’s nomination on one hand to supporting her signature policy issue on the other.”
Working together elsewhere
The ATA and OOIDA are together on at least one key initiative: as co-plaintiffs in the continuing litigation – so far unsuccessful – to keep California’s AB5 independent contractor law from being implemented against trucking.
But there has long been tension between the two, and OOIDA President Todd Spencer, in an interview with FreightWaves, did not hold back.
“It’s laughable to think that these folks give a hoot about small business truckers, because they never have,” Spencer said. “They’ve been on the wrong side of every issue for the last 40 years.”
An OOIDA spokesman said there had not been communication between the ATA and his organization over the Spear editorial.
As for its cooperation on the AB5 case, Spencer said OOIDA is “not naive enough to believe that the California Trucking Association (which is an affiliate of the ATA) is going to be interested in pursuing the same things that would affect most of our members.” But he added that given the dwindling number of pathways for blocking AB5 in California, joining the CTA suit means “we have no alternative but to be a party of that litigation.”
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