Great Owner-Operator Decision / Federal Preemption is Alive and Well, at Least in the Eastern District of Virginia

 

The purpose of the FAAAA was to prevent state laws from meddling in interstate commerce and interfering with routes, rates and services.  Remember the federal preemption argument is at the heart of ASECTT et al. v. FMCSA – state law cannot be used to hold shippers and brokers liable for negligent selection when using carriers determined to be safe to operate under federal law.

 

Now federal preemption and the FAAAA has been used successfully to defeat reclassification of owner-operators as employees under a grievous Massachusetts statute.  The United States District Court for the Eastern District of Virginia has decided in Sanchez v. Lazership that a Massachusetts statute of federal application cannot be used to reclassify independent contractors as employees in lights of the federal truth in leasing regulations.  This decision, which is thorough and well reasoned, for the first time seriously extends the preemption argument into the worker’s compensation arena – an area always thought to be the exclusive province of the states.

 

This is an important decision in light of the efforts of the Massachusetts Delivery Association to challenge the same statute in MDA v. Coakley which is pending in Massachusetts on cross-motions for summary judgment. (AEMCA filed an amicus curiae in support of this case.)

 

There is already one bad decision in the Martins case which is in conflict with Sanchez and a relatively new judge will be deciding the MDA lawsuit in view of this conflicting precedent on the same statute.

 

Whether the MDA case is won or lost, the Sanchez decision gives our industry hope that federal preemption and the FAAAA, even in the pro-labor arena of state worker’s compensation law, offers an important defense in the protection of small businesses and the independent contractor model upon which many are based.