The pushback on the U.S. Department of Labor Independent Contractor Rule continues apace and has gotten fresh ammunition. This 2024 Rule uses the Fair Labor Standards Act to reinterpret the distinction between employees and independent contractors and would adopt a six-pronged test with vague and open-ended requirements to tear down the independent contractor business model, eliminating the freedom of flexibility to call one’s own work hours, what work one chooses to take on, and whom one chooses to partner with in that work. This would be a nationwide standard that has no exemptions.
The U.S. DOL is using bureaucratic means to make an end-run around already failed legislation (see The PRO Act) in order to destroy independent professionals and small businesses across the nation. The Rule embeds the same tenets found in the ABC Test, which supports AB5, and we all know how well that went in California. The state’s trucking industry, in particular, continues to fight hard against AB5, and their battle is being watched by the rest of the industry in other states. Now, a Louisiana business has filed a lawsuit to stop the rule, which is scheduled to take effect on March 11.
Reclassifying independent contractors as employees is threatening the livelihoods & freedom of hardworking Americans-especially TRUCKERS. We have filed a lawsuit w/ @PelicanInst on behalf of Frisard’s Transportation to stop the Biden Administration’s attack on workers.… pic.twitter.com/Jxoe8kI4DY
— Liberty Justice Center (@LJCenter) February 8, 2024
A lawsuit filed on Thursday in Louisiana federal court seeks to challenge a Biden administration rule that would reclassify independent contractors as employees.
The U.S. Department of Labor’s rule is set to take effect March 11, though it is being challenged in multiple states. Julie Su, interim secretary of the department, has said misclassification “deprives workers of basic rights and protections” and believes the rule “will help protect workers.”
The plaintiffs in the lawsuit disagree with the government‘s contention.
And so do the other 60 million independent professionals across the nation.
In Georgia, a January request for an injunction was filed in the U.S. District Court for the Northern District of Georgia, known as Warren v. U.S. Department of Labor.
“By attempting to implement a rule with no basis in law, the Department of Labor is overstepping the bounds of the limited rulemaking authority Congress gave it,” said Buck Dougherty, the senior counsel at the Liberty Justice Center, in a news release. “We ask that the court set aside the Biden administration’s arbitrary rule change and reinstate the rules that employers, independent contractors and courts have relied on for decades.”
California Congressman Kevin Kiley, who has seen the harm AB5 did to California firsthand, has stated he will seek to have the rule rescinded using the Congressional Review Act.
My fast-track legislation to overturn Biden’s “Independent Contractor” rule now has 40 co-authors. Ask your Representative to sign on.
The Biden Administration admits this rule nationalizes California’s AB 5 catastrophe. The livelihoods of millions of Americans are at stake.
— Kevin Kiley (@KevinKileyCA) February 6, 2024
Of course, the legislation cannot be filed until the Department of Labor submits the language of the ruling to Congress. This smacks of when Biden issued his executive order on workplace vaccine mandates in September of 2021, but OSHA, another Department of Labor arm that Biden attempted to use, did not issue language until months later in November.
The lawsuit, filed in the U.S. District Court for the Eastern District of Louisiana by the Liberty Justice Center and Louisiana’s Pelican Center for Public Policy, was filed on behalf of Cully Frisard. The plaintiff is owner of a trucking business that has operated in Louisiana since 2014 and employs 30 truck drivers as independent contractors who receive a flat percentage for each load they haul.
The lawsuit says the new rule is “arbitrary, capricious, an abuse of discretion and otherwise not in accordance with law” and tilts the balance against firms like Frisard’s trucking company, which is dependent on independent contractors who can set their hours, decide on partnerships with companies and what products or services they’ll offer.
“The 2024 rule risks turning independent contractors into unwilling employees, threatening their freedom and livelihood,” James Baehr said in a release. He’s the special counsel at the Pelican Institute’s Center for Justice. “This one-size-fits-all approach undermines the essence of entrepreneurship opportunity, putting Cully’s American dream in jeopardy.”
It’s like Groundhog Day for the California independent professionals and the trucking industry that was destroyed by AB5, and many are still unsure of what to do about this latest end-run around their constitutional liberties. A group of writers and editors is also suing the DOL to stop the rule, and a group of business concerns, who had a prior lawsuit against the 2023 Independent Contractor Rule on procedural grounds, has asked for that lawsuit to be revived.
With Special Counsel Hur’s report that lays bare President Joe Biden’s cognitive decline, the fact that Biden has doubled down on his choice to first install Julie Su as “Acting” Secretary of Labor and then insist on re-nominating her despite her failure to be confirmed by the U.S. Senate casts even more scrutiny on the soundness and validity of this rule.