According to American Trucking Associations (ATA) President Chris Spear, the Biden Administration’s nomination of Julie Su as Department of Labor Secretary poses an existential threat to the independent contractor model that has been at the core of the trucking industry for several decades.
In a letter to the Senate Committee on Health, Education, Labor, and Pensions, Spear expressed his concern over Su’s previous support of California’s AB5 as it impacts trucking.
Because it uses the three-pronged ABC test designed by the California Supreme Court in the Dynamex decision, analysts believe that most independent truckers would be unable to meet all three parts of the test and would become company employees. Currently, the Department of Labor uses more criteria to determine the difference between a permanent employee and an independent contractor.
“AB 5 is designed to strip independent drivers of their choice and right to operate as contractors for motor carriers, in essence forcing them to become company employee drivers,” wrote Spear. “It is wreaking havoc on thousands of self-employed, small business owners by forcing them into legal limbo and placing administrative, compliance, legal and other unsustainable costs on the industry.”
Spear also said ATA is “gravely concerned” with the notice of proposed rulemaking published by the Department of Labor’s Wage and Hour Division in October that would likely have the same effect as AB 5 on a federal level.
“Without the hundreds of thousands of independent owner-operators in our industry today, the supply chain would grind to an immediate halt, and a way of life of hundreds of thousands of small businessmen and women could be eradicated,” wrote Spear. “Ms. Su has significant authority over the rulemaking process as deputy secretary of Labor and will have almost complete authority to write the final rule should she be confirmed as Labor secretary.”
In his letter, Spear offered a group of questions that Senators should ask of Su during her confirmation hearings:
- Do you consider AB 5 a policy success generally, and specifically as it relates to trucking?
- What is your message to self-employed truckers who were forced by AB 5 to leave California to save their business, income, lifestyle, and freedom to earn a living on their own terms?
- Many independent contractors choose to operate independently so they can determine their own schedules, grow their earning potential, and achieve their desired level of work-life balance. Why should they be denied the right to choose their own career path?
- Do you believe that the Department of Labor should consider contractual safety requirements between a motor carrier and an independent contractor as evidence of misclassification and a violation of the Fair Labor Standards Act?
Su previously worked as Secretary of the California Labor and Workforce Development Agency and is currently the deputy labor secretary. She would replace Marty Walsh who has left the administration to be the executive director of the National Hockey League’s player association.