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Using Carriers with Less than "Satisfactory" Safety Ratings?
By John Anderson
John Anderson  |
Brokers, shippers and anyone else hiring carriers should
NEVER use a carrier assigned, or given notice that it will be assigned, an
"unsatisfactory" safety rating. Any person responsible for putting an
unsatisfactory rated carrier on the road (for example, by tendering it a shipment)
can and likely will be liable for any injuries and damages that result. Similarly,
those hiring carriers should be reluctant to use any carrier with a
"conditional" safety rating, for the same reasons.
Carriers are responsible for the safety of their own
operations, and this includes maintaining a solid safety rating through
on-going monitoring and corrective action. Do not let a carrier deflect its
responsibility on to the DOT. You can be sure that injured parties and their
attorneys will not accept that as an excuse for using a poorly rated carrier.
John Anderson - Email John
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CSA 2010 Will Require Contract Revisions
By Kevin Anderson
Kevin Anderson  |
One of the critical changes CSA 2010 will make is the
replacement of SafeStat with the Safety Measurement System (SMS). Under SafeStat carriers were rated as either
"satisfactory", "conditional", "unsatisfactory" or "unrated".
However, with the change to SMS, carrier ratings will be replaced with a
Safety Fitness Determination (SFD) of "Continue Operation", "Marginal", or "Unfit". While this may appear to be mere semantics,
it will require you to review and revise, as necessary, your carrier qualification standards and documentation.
Contracts used by carriers (where the carrier subcontracts or "brokers" loads), shippers and brokers often
require motor carriers to maintain a "satisfactory" safety rating. However, with the end of SafeStat, the "satisfactory"
rating will no longer exist. The
contract language will need to be changed to ensure the same contractual effect
under the new SMS/SFD.
Similarly, many equipment leases with owner-operators, independent contractors, and
leasing companies require the vehicles leased to meet certain federal safety
standards or that certain safety ratings be maintained. These contracts will also often have language
that must be revised in light of the changes being imposed by CSA 2010.
Finally, tariffs used by motor carriers (a few issues ago, we explained why tariffs are still required and recommended that every carrier
publish a tariff to define the terms of its relationship with other businesses) also will require reevaluation. Tariffs
often refer to "satisfactory" ratings and use other terms that will be
inconsistent with CSA 2010.
As we get closer to the implementation of CSA 2010, it is
important to have your company's legal documents reviewed and revised to
accommodate these changes.Kevin Anderson - Email Kevin |
States Target Carriers on Driver Classification
By John Anderson
John Anderson |
The state of Washington
has been very aggressive in auditing trucking companies and reclassifying owner
operator contractors as employees. These
audits are conducted by the Washington Employment Security Department
and focus on the specific terms and conditions of the equipment lease
being used. If the equipment lease does not contain all of the correct
("magic") words and provisions, then the owner-operator contractors are
reclassified and an assessment made.
However, even if a carrier's equipment lease may have been deficient
for purposes of the audit period, it can be changed going forward. That is, a
carrier may be required to pay an assessment for the past audit period, but is
free to change its written equipment lease and operations to properly classify
the owner operator drivers as contractors and thereby avoid reclassification in
the future. Washington's
administrative rules specifically state what terms and conditions must be in an
equipment lease and followed on a day to day basis in order for a carrier to properly
classify its owner operators as contractors.
Similarly, the federal law is fairly well settled in regard
to what is required to properly classify owner operators as contractors. The
"tests" are known, although not always easy to apply. There is
never a guaranty that the feds or states will accept a carrier's classification
of owner operators as contractors, and there is always a risk that they will
reclassify a carrier's contractors as employees. The only way to avoid all risk is to
treat all workers as employees. However, if a carrier is willing to assume the
risk of an audit and possible reclassification, then there are specific contractual terms and conditions and methods of operation that can be implemented to
minimize that risk.
John Anderson - Email John
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The information presented in this communication should not be construed to
be formal legal advice
nor the formation of a lawyer/client relationship.
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