Final ‘Driver Coercion’ rule is published in Federal Register, will take effect in January

Earlier today the final rule for the Federal Motor Carrier Safety Administration’s “Prohibiting Coercion of Commercial Motor Vehicle Drivers,” which is more commonly known as the driver coercion rule, was published in the Federal Register.

The rule, which will take effect on January 29, 2016, adopts regulations that prohibit motor carriers, shippers, receivers, or transportation intermediaries from coercing drivers to operate commercial motor vehicles (CMVs) in violation of certain provisions of the Federal Motor Carrier Safety Regulations (FMCSRs)—including drivers’ hours-of-service limits; the commercial driver’s license (CDL) regulations; drug and alcohol testing rules; and the Hazardous Materials Regulations (HMRs), according to the Federal Register. And it added that the rule prohibits anyone who operates a CMV in interstate commerce from coercing a driver to violate the commercial regulations.

When the FMCSA initially issued a notice of proposed rulemaking request for comments for a rule entitled “Coercion of Commercial Motor Vehicle Drivers in May 2014, there was significant confusion as to how the rule would work among shippers, carriers, receivers, 3PLs and brokerages, and other industry stakeholders. What’s more, it included various moving parts that were viewed as fundamentally changing multiple aspects of how freight is moved by motor carriers, tendered, and brokered.

In the initial rulemaking, FMCSA said that the rule would prohibit anyone who operates a CMV in interstate commerce from coercing a driver to violate the commercial regulations, adding that the rule includes procedures for drivers to report incidents of coercion to the FMCSA, which the agency would follow in response to allegations of coercion.

And it added that an act of coercion by a carrier, shipper, receiver, or transportation intermediary does not absolve the driver of responsibility to comply with safety regulations, including HOS rules. It went on to explain that the FMCSA definition of coercion prohibits threats by the aforementioned parties to withhold future business from a driver for objecting to operate a vehicle in violation of safety regulations. What’s more, FMSCA explained a threat would not constitute coercion unless the driver objects or attempts to object to the operation of a vehicle for reasons related to HOS or other regulations.  Violations of the driver coercion rule would result in a fine of up to $16,000, said the FMCSA, coupled with the agency able to suspend, amend, or revoke the operating authority registration of a for-hire motor carrier, broker, or freight forwarder.

The rule in that form raised many concerns from industry stakeholders, with Transportation Intermediaries Association President and CEO Bob Voltmann saying earlier this year that “it changed the presumption to what you knew to what you should have known and it puts that onus on every shipper and receiver and anybody who engages a truck. It is what you should now about the driver, which means you have to ask and means you are increasing their vicarious liability because now you have to know it creates a Catch-22 situation.”

As an example, Voltmann said that if a shipper calls a carrier to move a shipment, and the carrier says that can be handled, a situation can occur in which a driver arrives and tells the shipper he does not have enough hours to make this run, meaning that the shipper was not correctly informed.

This situation, in turn, leaves the shipper in a predicament, Voltmann, said, because if the shipper tells the driver he needs to make this run, it is viewed as coercing the driver into breaking the rules. And he said that premise would also apply if the shipper intended to call another motor carrier to move the load and is also coercion as the driver has been threatened financially.

The final rule, though, is not a carbon copy of its predecessor. Some of the key changes include:
-amending the definition of coercion from a violation for a shipper or 3PL to refuse a load to a driver if it “knew or should have known” that a driver was about to exceed or already exceeded HOS regulations even if the driver informed the shipper or 3PL of the impending HOS deadline;
-with a shipper and 3PL having to ask a driver about HOS availability and raising liability concerns, the final rule makes it clear that the driver has an affirmative obligation to inform the motor carrier, shippers, receiver, or 3PL when a trip cannot be made without violating one or more regulations;
-brokers are not allowed to directly communicate with drivers and are not employees of a motor carrier and deal directly with the motor carrier, not the specific driver, and if a broker communicates directly with a driver, they could be held liable for vicarious liability and coercion; and
-the deadline to file coercion complaints will work off of a 90-day filing deadline to ensure drivers have a sufficient time to prepare and submit a coercion complaint

TIA Senior Government Affairs Manager Chris Burroughs said that prior to the final rule being published there was a lot of murkiness and uncertainty but he said the FMCSA has done a pretty good job of clearing some of those issues up, particularly ones focusing on the relationship between a broker and a motor carrier in terms of what a party “should have known” or “should know” as it relates to carrier and a specific driver’s hours.

“When this was first released last year, it raised a huge red flag to us in terms of liability concerns,” he said. “Brokers hire a motor carrier and not the driver. If we had a driver show up to a facility as one of our customers that said he only has one hour left to drive and cannot take that load….previously the shipper would contact the transportation intermediary and say the driver only has an hour left and another driver is needed. But before this final rule clarification was issued, if that shipper contacted one of our members and our member contacted the carrier saying this driver is saying the only has an hour left and someone else is needed, that driver could tell the FMCSA he lost business because of a broker sending him there. “If a driver calls a carrier and says he has one hour left and the carrier says just get it done and drive, that is coercion.”

When asked what advice he would provide for shippers as it relates to the final rule, Burroughs said it’s similar to what TIA tells its own members: make sure you have good procedures in place; don’t talk directly to drivers to avoid vicarious liability; and if there is an issue, work with the motor carrier.

When the rule takes effect, Burroughs said TIA will be taking a close look at how enforcement is done, saying there is a concern that it creates a ‘he said-she said’ between a motor carrier driver, owner-operator and a shipper or broker, with TIA paying close attention to how TIA responds to coercion complaints and what enforcement action is taken.

“Everyone in the industry believes that no driver should be coerced into doing anything illegal, we can all agree with that,” he said. “But we don’t want to create a situation where one of our guys gets unfairly put in a situation where he has a pay a $16,000 fine for something he had no responsibility over. It will be very interesting to see how this is enforced.”