Bill Trucking Groups Warn Will Wipe Out Owner-Operators Expected to Pass House Next Week
Washington D.C. – Legislation trucking groups warn will destroy the industry’s independent contractor model is expected to get one step closer to becoming law next week.
The U.S. House of Representatives is expected to consider and debate the Protecting the Right to Organize (PRO) Act of 2021 next week, according to Majority Leader Steny Hoyer (D-MD).
The PRO Act was re-introduced last month after the House Democratic majority passed the same bill in February of 2020 before it eventually stalled in the Republican-controlled Senate.
Now though, Democrats control the House, Senate and White House, and trucking groups see this new effort as having a real chance to dismantle the industry.
“This is that threat to the trucking industry that threatens the way this industry has been developed for the last 100 years,” Dave Heller, vice president of government affairs for the Truckload Carriers Association (TCA) told Transportation Nation Network (TNN) this week. “This is one of those the full industry can get behind and oppose. I don’t think there is an [trucking] organization out there that would be in support of this.”
“Death Warrant for Small Business”
The PRO Act includes language similar to California’s controversial Assembly Bill 5 (AB5), which imposes an “ABC test” to determine the status of an independent contractor.
At issue, just as in AB5, is the so-called “B prong,” which classifies a worker as an “employee” of the company unless that worker performs a service “outside the usual course of the business of the employer.”
Trucking industry stakeholders say enforcement of such a statute would all but eliminate the lease owner-operator model across the nation.
In a letter sent to each member of Congress last month, the Small Business in Transportation Coalition (SBTC) said the PRO Act would be a “death warrant for small business.”
“This move would decimate small businesses and eventually create oligopolies in trucking contrary to the spirit of our antitrust laws and would be offensive to the American dream,” the SBTC wrote. “Once this middle step of leased owner-operators is eliminated, it will be virtually impossible for a would-be start-up trucking business owner to make the giant leap from company driver to independent carrier due to high insurance premiums.”
How Is Trucking Fighting It?
Most major trucking groups have expressed their opposition to the bill, but defeating it is going to be a daunting challenge.
Having the right strategy is essential, so what is the best way to go about it?
Some industry insiders advocate to join with other industries opposing the legislation such as freelance writers and artists, while other stakeholders are lobbying for a carve out specifically for trucking.
“This is a big, broad bill that affects all kinds of different industry and every industry is going to be fighting for their own,” Lewie Pugh, executive vice president of the Owner Operator Independent Driver’s Association (OOIDA) told TNN this week. “We would be very interested in talking about a carve out for trucking.”
Heller agrees and says it’s likely the option with the best chance to succeed.
“The carve out makes the most sense because so many different industries are so vastly different when it comes to independent contractors. The carve out provision is probably more toward our ability,” Heller explained.
The SBTC is also on-board with this approach.
In fact, its letter specifically asked Congress to “amend this bill to make truck owner-operators exempt.”
“Why Are We Eliminating This Aspect of the Industry?”
Advocates of the PRO Act argue independent contractors are often misclassified and subjected to labor abuses.
Both Heller and Pugh acknowledge “abuses” of lease operators still occur within the trucking industry, but they assert that’s not a predicate to destroy the entire model.
“Why are we eliminating this aspect of the industry?” Heller questioned. “There are some bad apples out there, but there are people who succeed in this model.”
Pugh said the lease model must remain intact but urged that carriers offering truck and equipment leases should be held to account if they offer non-compliant and exploitative lease terms.
Will The PRO Act Become Law?
TNN has spoken to numerous trusted sources on Capitol Hill that have indicated President Biden would likely sign the bill if it makes it to his desk.
It will likely win passage in the House and the real battle will be in the Senate.
Unless Democrats move to end the filibuster rule requiring 60 votes, they will need to pull in some Republicans as well.
In such a narrowly divided chamber (50-50), Democrats still have a bit of work to do, but trucking groups are not taking anything for granted this time around.
“A unified front in opposition to the PRO Act certainly says to Congress that the trucking industry is speaking clearly on this issue,” Heller commented.
The question now remains, will Congress listen?
Stay with TransportationNation.com for the latest developments.