Representative Kevin Kiley (R-California) and Senator Bill Cassidy (R-Louisiana) introduced Wednesday a Congressional Review Act (CRA) resolution that seeks to overturn the Department of Labor’s (DOL) final worker classification rule that threatens to upend trucking's use of independent owner operators when it takes effect Monday. A CRA is a tool Congress can use to examine and overturn federal agency rules and must passed by both chambers and signed by the president. If vetoed by the president, it has to pass by two-thirds of the members of each house.
Kiley's resolution has 55 co-sponsors.
[Related: New IC rule will have 'unintended consequences']
“Gavin Newsom and Julie Su’s AB 5 severely restricted independent contracting in California, destroying thousands of livelihoods and harming California’s economy," Kiley said. "As Acting Secretary of Labor, Su and the Biden Administration have announced a new Department of Labor rule, modeled after the same job-killing AB 5 that will cost millions of independent professionals across the country their livelihoods while restricting the freedom of many millions more to have flexible work arrangements. Our legislation under the Congressional Review Act nullifies this terrible regulation and protects independent contractors."
Although it's been legally entangled on-again and off-again since passing in 2019, AB 5 generally called into question trucking's legal use of contracted/non-employee carriers and sought to determine if independent contractors in California are employees or indeed independent for purposes of its labor code.
The state rule served as a model of sorts for the new federal guidelines set to go into effect March 11, and Cassidy said the new DOL rule "makes it easier to forcibly and coercively unionize workers," adding the Biden administration’s priority should not be "to increase individual freedom and opportunity."
In a statement provided to CCJ Wednesday​​​​, Truckload Carriers Association Senior Vice President of Safety and Government Affairs David Heller called independent contractors "an integral part of the trucking industry, representing a decades-old business model that has served the American economy and general public exceptionally well." He added that TCA applauds the CRA resolution filed by Rep. Kiley and Sen. Cassidy "as an effort to support our industry against unwanted threats that oppose a widely used practice by our industry, which the recent DOL rule represents ... If left unchallenged, the DOL rule would jeopardize the freedoms of those businesspeople who have chosen to become entrepreneurs and stand against the American dream that this country was founded upon."
In his support of the repeal, American Trucking Associations President and CEO Chris Spear noted that "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."
The Biden Administration’s IC rule, Spear said, eliminates this freedom and intentionally undermines the livelihoods of truckers and their families across the country "by replacing a clear, straightforward standard with a tangled mess that will weaken our supply chain." Spear added that the trucking industry has relied on independent contractors since the inception of interstate trucking, and court decisions over the last 90 years have continually reaffirmed the legitimate role independent contractors play in the economy.
In 2021, DOL issued a rule supported by ATA clarifying the definition of employee under the Fair Labor Standards Act as it relates to independent contractors. The department’s new rule, however – which ATA has sharply criticized – replaces the 2021 standard.
ATA this week joined a broad coalition of organizations, including the U.S. Chamber of Commerce, in filing a lawsuit challenging the DOL rule crafted under the leadership of Acting Secretary of Labor Su, herself an architect of California's AB 5 serving at the time as California's labor commissioner, then as secretary for the California Labor and Workforce Development Agency.
[Related: Julie Su again headed toward DOL confirmation, trucking still opposed]
“Independent contractors, entrepreneurs and small businesses are fed up with the Department of Labor continually breathing down their necks,” said Education & the Workforce Committee Chairwoman Virginia Foxx.
