Owner-operators are an integral part of the trucking industry. With approximately 350,000 owner-operators registered in the United States, their contribution to the trucking industry is significant. Most importantly, owner-operators provide motor carriers with flexibility.

The Federal Motor Carrier Safety Regulations (“FMCSR”) afford owner-operators significant protections and dictate the requirements of owner-operator leasing agreements and certain aspects of the business relationship. A motor carrier’s failure to comply with the FMCSR provisions applicable to leasing agreements exposes them to disciplinary action, as well as lawsuits brought by owner-operators. As new federal regulations governing the transportation industry are constantly proposed and adopted, it is imperative that motor carriers adjust their owner-operator leasing agreements in light of the ever-evolving regulations to ensure compliance with all applicable FMCSR provisions. Motor carriers should be aware that the recent ELD Mandate may require modifications to their owner-operator leasing agreements.

The ELD Mandate

In December 2015, the Federal Motor Carrier Safety Administration (“FMCSA”) published a rule requiring commercial truck drivers to log their hours of service using an electronic logging device (“ELD”) approved by the FMSCA (“ELD Mandate”). The ELD Mandate was effective as of February 16, 2016 with a compliance date of December 18, 2017 for most carriers and drivers (carriers and drivers who were using automatic on board recording devices prior to the ELD Mandate may continue to use those devices through December 16, 2019).

The motor carrier must select and use an ELD that is approved by and registered with the FMCSA. The approved ELDs range significantly in price for the unit itself as well as the monthly service fees associated with its use. Many motor carriers are choosing to purchase the ELDs in bulk from the manufacturers at a discounted rate then offering to pass the savings through to their owner-operators by selling the ELDs to them as a convenience and at the discounted rate. Additionally, many motor carriers are choosing to pass the cost of the ELD’s associated monthly service fees to their owner-operators. Motor carriers must be mindful of the applicable regulations governing owner-operator lease agreements and ensure that their lease agreements and their actions are compliant with the regulations.

Owner-Operator Lease Agreement Requirements

FMCSR dictates the terms that must be contained in every lease agreement between an owner-operator and a motor carrier. Specifically, the FMCSR, and the case law interpreting the applicable provisions, require that all items charged back to the owner-operator be specifically identified in the lease agreement, along with how the amount charged back will be calculated or determined. This must be done within the lease agreement itself or through an addendum modifying the lease agreement, signed by both the owner-operator and the motor carrier. Additionally, the FMCSR prohibits a motor carrier from requiring an owner-operator to purchase any products or services from the motor carrier as a condition of entering into the lease agreement.

Required Action of Motor Carriers

Motor carriers utilizing owner-operators must take action to ensure that their leasing agreements, and their actions, are compliant with FMCSR in light of the ELD Mandate.  A motor carrier must remember that it is permitted to offer to sell the ELD unit to the owner-operator as a convenience, but cannot require the purchase of the unit from the motor carrier itself. The motor carrier can dictate the type of unit the owner-operator must purchase, but the owner-operator must be free to purchase the unit from any source available. Additionally, if a motor carrier is going to charge back the cost of the ELD unit, or the associated monthly service fee, the motor carrier must ensure that these items are specifically included in the lease agreement. If the ELD and/or service fee is not specifically identified as an item that will be charged back to the owner-operator, an addendum to the leasing agreement, signed by both the motor carrier and the owner- operator, is required.

If you have questions regarding whether your owner-operator leasing agreements are compliant with FMCSR in light of the ELD Mandate, or you need assistance in modifying the agreements to bring them into compliance, please contact Renee Bowen at rbowen@fandpnet.com or 410.230.3943.

Last Tuesday, May 2, F&P associate Tony Villeral received a favorable decision from the District of Columbia Administrative Hearings Division following a two day formal hearing.

The claimant, a graduate student, alleged to have sustained an accidental work related injury to the low back on 3/15/15 while working part time for the employer. On that date, a co-worker took her chair and when Claimant went to sit, she fell on her buttocks and back.  In addition to  radicular low back complaints, the claimant also alleged she hit her head causing vision, balance and concentration problems, and neck issues resulting in radicular upper extremity complaints.

The claimant’s treating physicians causally related all of the claimant’s symptoms to the work accident, recommended low back surgery, and disabled the claimant from her part time job with the employer and her concurrent job as a research associate for Georgetown.  As a result, she was entitled to wage stacking per the District of Columbia Workers’ Compensation Act.

A formal hearing was held on 10/24/16 and 11/7/16, on the claimant’s request for TTD from 3/16/15 to 3/18/15 and 3/31/16 to the present and continuing; causally related medical treatment including lumbar spine surgery and post concussive therapy and payment of causally related medicals.  Several defenses including causal relationship, reasonableness and necessity, nature and extent and voluntary limitation of income were raised.

The very thorough Compensation Order explained the basis for finding that the claimant was not credible, and rejected the opinions of the treating physicians due to “sketchiness, vagueness and imprecision in the reports”.  Judge Knight explained how Claimant produced a 3/19/15 illegible note with a diagnostic code for a concussion, but the corresponding 3/19/15 and 4/2/15 medical reports from Dr. Mullner state the claimant did not hit her head.  Moreover, it wasn’t until May of 2016 that Dr. Heinke began producing reports indicating the claimant did hit her head, but the treatment was more focused on the low back. The claimant testified that she did not correspond with her treating physician about medical notes at the formal hearing.  However; an email was obtained by the defense indicating the claimant did in fact review her medical records prior to her physician placing them on letterhead.  The Compensation Order findings reflect that the claimant’s communication with her physician resulted in serious credibility issues. Specifically, the treating physician emailed the claimant with medical notes for Claimant’s review and requested Claimant’s approval prior to placing them on letterhead.

Judge Knight also rejected treating physician Dr. McGrail’s opinions because they relied heavily on Claimant’s subjective symptoms in light of the evidence indicating the claimant may be exaggerating her symptoms.   Dr. McGrail noted a new onset of cervical symptoms related to the work injury on 1/12/16, 10 months after the work accident, and diagnosed the claimant with cervical radiculopathy.  Judge Knight felt his reports lacked explanation regarding causal relationship in the face of his minimal physical examination findings.  Specifically, Dr. McGrail failed to explain how the symptoms are related to the work injury in the face of a normal MRI, lack of any previous complaints and his limited findings upon physical examination.

Judge Knight rejected the opinions of the Claimant’s treating physicians in favor of the opinions of the employer’s independent medical evaluators.  Judge Knight indicated that the independent medical evaluations provided by the employer deserved more weight than the treating physicians because they were thorough with clear explanations for findings. Moreover, each of the three IME doctors obtained by the employer independently opined the claimant was exaggerating her symptoms and had nonphysiologic findings.

Ultimately, the Administrative Law Judge agreed with the defense and denied the claim in its entirety, finding that the alleged low back, neck, and post concussive symptoms are not causally related to the work injury and all other issues were therefore moot.

F&P President, Bert Randall, Jr., will be speaking at next month’s USLAW Employment & Labor Law Exchange.  The event will take place from May 1-May 2 at the Langham hotel in Chicago, IL.  The session is titled  “It’s About More Than Which Bathroom – Gender Identity Issues Changing Ideas, Changing the Workplace from the Canadian and US Perspective,” and employment lawyers from both Canada and the US will discuss the history and current state of the law in both countries with respect to gender identity.  They’ll also brainstorm ideas with participants, and address ways to mitigate risk in employment/gender identity claims.

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Franklin & Prokopik is pleased to announce that we have added a new associate to the firm, Dana Miller. Dana brings extensive knowledge and trial experience to F&P in the field of general liability, including, construction, automobile liability, premises liability, products liability, and toxic torts.  Her experience also includes subrogation, bad faith, insurance coverage, appeals, and alternative dispute resolution. Dana graduated with a Bachelor of Arts degree from Vanderbilt University in 2006 and from the University of Baltimore, School of Law in 2009. During law school, Dana represented clients as a Rule 16 Student Attorney for the Office of the Public Defender in Baltimore City.  She also worked as a law clerk for a boutique defense firm in Alexandria, Virginia, and was a research assistant in the torts department.  Following law school graduation in 2009, Dana served as a judicial law clerk for the Honorable Judith C. Ensor, in the Circuit Court for Baltimore County.  Dana is admitted to practice law in Washington, D.C. and the state of Maryland.