New FMCSA Rule Targets Willful Violators
January 21, 2014
The Federal Motor Carrier Safety Administration’s newest enforcement tool is a shutdown order for carriers that flagrantly disregard the safety rules.
Under a final rule to be posted this week, the agency can suspend or revoke the authority of willful repeat violators, and impose civil or criminal penalties.
The rule also says the agency can target carriers that give employees who are egregious violators control over their operations.
And it goes after the practice of “reincarnation” to avoid enforcement: carriers that operate multiple businesses to conceal safety violations can lose their authority.
The agency has been working on these reforms for years. In 2012, the Government Accountability Office said the agency could improve its screening to put “chameleon” scofflaws out of action. That study came at the request of Congress in the wake of a 2008 bus crash in Sherman, Texas, killed 17 people. The bus company had been ordered out of service two months before the crash.
The 2012 highway bill, MAP-21, gave the agency authority to proceed with the rule.
“Congress directed the Agency to implement this rule because it recognized the danger that carriers seeking to evade compliance with FMCSA’s regulation pose to the motoring public,” the agency says.
Revocation is a “significant penalty,” the agency acknowledged, adding that relatively few carriers commit these violations.
“This rule is necessary and appropriate, however, to address motor carriers that engage in a pattern or practice of willfully violating safety regulations or forming new entities or affiliate relationships to avoid compliance or mask or otherwise conceal noncompliance.”
Under the rule’s procedures, if the agency finds that a carrier has not complied or has concealed its non-compliance, it will investigate the situation to determine if there’s a pattern.
The determination will be based on a number of factors, including the frequency of the violations and how recently they occurred.
The agency also will look at the safety risk created by the violations, whether the carrier or person knew or should have known the violations broke the rules, and whether the carrier or person was intending to hide the violation.
The rule includes provisions for administrative review of the agency’s findings.
In its commentary on the rule, the agency addresses concerns raised by carriers and others.
Werner Enterprises, for example, expressed a concern shared by many. There’s a risk, Werner said, that a carrier with a good safety record and a strong safety culture could be targeted if it hired an officer with a history of noncompliance, even if that did not harm its safety performance.
The agency responded: “This rule will target only the worst actors in the industry. As a practical matter, FMCSA finds it highly unlikely that a motor carrier with an excellent safety compliance record would place someone with a history of egregious disregard for safety compliance in a position of controlling influence over operations.
The rule provides safeguards for carriers that innocently put a bad actor in a position of controlling influence, the agency said. The carrier will be able to explain the hire or remove the person before the agency takes final action. The key factor will be if the carrier has adequate safety management controls.
At the same time, the agency said, it does not believe it should wait for an accident before taking action.
“To the contrary, the intent of this rule, as mandated by Congress, is to prevent non-compliant actors from circumventing their negative safety compliance records, and thus preventing crashes, injuries and fatalities from occurring in the first place.”
On another issue, the Transportation Intermediaries Association suggested that the rule be expanded to cover unlawful brokerages, and the Owner-Operator Independent Drivers Association wanted to add freight forwarders.
The agency replied that the rule will apply only to brokers and forwarders that operate trucks and thus fall under its safety jurisdiction.
OOIDA also wanted to know if a single act of concealment, rather than a pattern, could trigger enforcement.
The agency said it intends to go after egregious conduct and one act of concealment could be sufficient. But that act will be considered in the context of the carrier’s overall conduct.
American Trucking Associations and FedEx expressed concern that the agency’s definition of “officer” is overly broad and should not include contractors and consultants.
The agency replied that Congress intended to include contractors and consultants.
“All evidence suggests that Congress sought to target bad actors based on their conduct and the influence they wield over motor carrier operations, regardless of their position, title or employment status,” the agency said.
ATA also worried that including contractors as “officers” would have a chilling effect on carriers retaining outside help to improve safety.
The agency said that people hired to help improve safety would not be targeted.
“That said,” the agency continued, “FMCSA has observed instances in which consultants have exercised controlling influence over operations to help motor carriers avoid compliance or evade the consequences of previous instances of noncompliance.”
These consultants are not technically employees, but their influence is detrimental to safety, the agency said.
“The Agency intends for this final rule to have a deterrent effect on persons such as contractors, agents or consultants who exercise a controlling influence and advise motor carriers on how to circumvent FMCSA’s safety regulations.”
A copy of the 85-page final rule is available on the FMCSA website. The effective date will be posted when the rule is published in the Federal Register.