Page 50 - ATR 4 2014 web

ThE lasT WorD

What’s in a name?

owned their own vehicles and had some claimants may have driven for mul-
by Greg Jones discretion in how they operated, FedEx tiple carriers simultaneously and even
Guest Writer had dictated standards for drivers’ though the owner/operators had con-
appearance, had set specifications for tributed nothing towards workers’
So, is that driver your employee? the driver-owned trucks and had con- compensation premiums. Indeed, the
Or maybe an independent contractor? trolled driver work hours as well as how prospects of having to pay non-insured
And what’s the big deal anyways? and when packages were to be delivered. claims out of pocket for scores of own-
Well, it might not be a big deal On balance, the Court concluded that er-operators (and their own drivers)
in some respects. But if facing expo- the independence enjoyed by the drivers threatened to wreak havoc with motor
sure for hourly wages, unemployment in certain facets of their operations was carriers’ finances.
insurance taxes and company benefits overshadowed by the motor carrier’s Legislation proposed by the
is critical to your company, then the control (or “right to control”) other Association eventually became Act 1166
“employee”/ “independent contractor” aspects of their operations. Applying of 2013, which created the country’s
distinction is a big deal. California and Oregon laws, the Ninth first system of its kind whereby owner-
Unfortunately, in our industry the Circuit ruled that FedEx’s drivers are operators could elect to obtain worker’s
determination of driver status remains employees for purposes of wages and compensation coverage provided that
a rather murky and treacherous area. related benefits. they would pay the premiums. This
And that lack of legal predictability So how will Arkansas trucking legislative solution enabled owner-
can serve as the wellspring for costly companies fare in the wake of these operators to gain access to needed
litigation, as exemplified by two Ninth two recent decisions? As a legal matter, worker’s compensation coverage, yet
Circuit Court of Appeals decisions the Ninth Circuit’s rulings have prec- simultaneously protected the motor car-
issued Aug. 27, 2014. Both cases pitted edential effect only in California and riers from undue financial exposure.
FedEx Ground against FedEx delivery Oregon. Aside from those Arkansas- But language in Act 1166 also expresses
drivers in California and Oregon. The based carriers conducting substantial the sentiment of the Arkansas General
core issue was whether those drivers operations on the West Coast, the Assembly that, even if provided workers
would be characterized as “employees” two rulings may have no immediate compensation benefits, owner-operators
versus “independent contractors” under impact here. Yet given the few reported and their drivers are not “employees” of
California and Oregon laws. If deemed Arkansas cases addressing this issue, the motor carriers for whom they oper-
to be “employees” (rather than “inde- it is likely that advocates for groups of ate – even if they drive exclusively for a
pendent contractors” as their operating drivers may brandish these two deci- single motor carrier. For Arkansas car-
agreements with FedEx described them), sions if and when they sue Arkansas riers facing the prospect of future litiga-
then FedEx faced wide-ranging exposure motor carriers. tion over what name their drivers will
for unpaid wages and company benefits. The Arkansas Trucking Association be called, this may be a useful arrow to
In the twin decisions, the Ninth has not sat idly by. In 2013, your have in their litigation quivers.
Circuit held that the contractual lan- Association addressed a somewhat
guage labeling the drivers as “inde- related issue in the workers compensa- Greg Jones is a partner with Wright,
Lindsey & Jennings LLP in Little Rock
pendent contractors” did not dictate tion context. Specifically, motor carriers and serves as General Counsel to the
the issue’s outcome. The Court found were facing claims by owner-operators Arkansas Trucking Association, Inc.
it significant, that while the drivers (or by their drivers) even though the He can be reached at gjones@wlj.com

Opinions expressed on this page may not reflect official policies or opinions of the Arkansas Trucking Association
or the American Trucking Associations.

50 ArkAnsAs truckinG rePort | issue 4 2014