U.S. House Passes Bill Trucking Groups Warn Could Lead to Wipeout of Many Owner-Operators
Washington D.C. – The U.S. House of Representatives today passed a bill many trucking stakeholders warn could result in the dismantling of the industry’s independent contractor model.
On Tuesday evening, the Democratically-controlled House passed H.R. 842, also known as the Protecting the Right to Organize (PRO) Act of 2021.
The final vote was 225-206 with just five Republicans voting in favor and only one Democrat in opposition.
It will now move to the U.S. Senate where Senate Majority Leader Chuck Schumer (D-NY), who is a sponsor, will look to find a way to get it through the chamber and to President Joe Biden’s desk for final approval.
The PRO Act already has significant support in the Senate boasting more than 40 sponsors and co-sponsors.
Trusted sources on Capitol Hill tell Transportation Nation Network (TNN) there is a “real threat” that Democrats will be able to eventually get it approved using one of a various number of procedural and/or political tactics.
How Does The PRO Act Threaten Trucking’s Independent Contractor Model?
While the PRO Act is largely an effort to expand various labor protections related to employees’ rights to organize and collectively bargain in the workplace, it also contains other provisions that trouble many trucking groups.
At the heart of the concerns is that the PRO Act amends the National Labor Relations Act (NLRA) by imposing an “ABC test” to determine whether a worker is an employee or independent contractor.
The so-called “B prong” of the test 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 stakeholders fear the PRO Act’s ABC test could, in practice, be expanded to include non-union businesses ultimately paving the way to reclassify lease owner operators as employees and all but eliminate the model across the nation.
Trucking Groups Speak Out
Dave Heller, vice president of government affairs for the Truckload Carriers Association (TCA) told TNN last week if the PRO Act becomes law, it would “threaten the way this industry has been developed for the last 100 years.”
The Small Business in Transportation Coalition (SBTC) said the PRO Act will be a “death warrant for small business.”
In a letter sent to each member of Congress last month, the SBTC wrote, “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 Owner Operator Independent Driver’s Association (OOIDA) also spoke out on the matter this week.
On Monday, the group representing more than 150,000 owner-operators sent a letter to House members urging them not to move forward.
“The owner-operator model has a well-established history and provided millions of truckers the opportunity to be true independent contractors and small-business entrepreneurs,” said Todd Spencer, president and CEO of OOIDA. “While we understand that the PRO Act is designed to specifically address classification issues for the purposes of labor organizing, we believe that in practice the test may also be expanded to classify workers under other laws.”
Spencer did acknowledge “problematic lease-purchase schemes” often result in owner-operators having “no independence” from the motor carrier they lease with.
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However, he asserted the PRO Act will not solve the problem, but instead, will “create uncertainty for drivers and motor carriers utilizing this owner-operator model.”
The SBTC contends that despite the abuses by some motor carriers, many drivers have success using the lease model as a bridge to true independence of operating under their own authority.
The 15,000-member group claims removing this as an option will make starting a trucking business much more difficult.
“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,” SBTC told Congress.
TransportationNation.com will continue to track it closely.