Dive Brief:
- A federal judge dismissed Thursday a New Mexico trucking company’s motion to preliminarily enjoin the U.S. Department of Labor’s 2024 independent contractor final rule, delivering a regulatory victory to the Biden administration in its final weeks.
- In Colt & Joe Trucking, LLC v. U.S. Department of Labor, the plaintiffs alleged that DOL’s rule caused them to end the employment of one of their four independent owner-operator drivers and left them unable to hire a replacement. In their May 2024 complaint, the plaintiffs also claimed that DOL lacked the statutory authority to issue the rule, which the company alleged was arbitrary, capricious and unconstitutional.
- Judge Kea Riggs sided with DOL, holding that the plaintiffs failed to show they were injured by the rule, therefore indicating that they lacked standing to sue DOL. Riggs similarly dismissed the plaintiffs statutory and constitutional claims, while holding that the plaintiffs “improperly briefed” their arguments about violations of due process and the Regulatory Flexibility Act.
Dive Insight:
DOL’s rule has so far prevailed in the courts despite several attempts to block it from taking effect. Riggs’ decision joins that of a Georgia federal judge who similarly dismissed a challenge to the final rule by a group of freelance writers and editors last October. The plaintiffs in the case, Warren v. U.S. Department of Labor, have since appealed that decision to the 11th U.S. Circuit Court of Appeals.
A separate challenge brought last year by Louisiana transportation workers who sought a temporary restraining order and preliminary injunction of the rule also failed when a judge denied both motions. Plaintiffs in that case, Frisard’s Transportation v. U.S. Department of Labor, appealed to the 5th Circuit and the court has scheduled oral argument for February.
Yet another challenge, Coalition for Workforce Innovation v. Su, is the continuation of a longstanding legal fight opposing the Biden administration DOL’s decision to replace its previous independent contractor standard with the current one proposed in the 2024 final rule. The case is ongoing.
Announced more than one year ago, the final rule sought to expand the Fair Labor Standards Act’s wage-and-hour protections to workers whom the agency believes are misclassified as independent contractors. The rule established a “totality-of-the-circumstances” framework for evaluating whether a worker is properly classified as an independent contractor.
The Colt & Joe Trucking plaintiffs argued that they had taken steps to avoid litigation resulting from the rule. But Riggs held that these assertions did not give rise to standing “because they are not specific [facts], but rather conclusory assumptions about Plaintiff’s future.”
Riggs also found that DOL did not act from a faulty legal premise when promulgating the final rule and properly accounted for the costs to regulated parties when doing so.