The FMCSA and the Coercion Rule- A Risk Management Nightmare for Logistics Operations

Well, they did it again. Effective January 19th, 2016, the regulators created a new rule that the transportation industry will be reacting to- and scarily enough, there is no current solution. Moreover, the insurance industry which works off of best practices underwriting is in consternation with how to underwrite a new, unforeseen exposure- Coercion

The Department of Transportation (DOT) through their safety agency, The Federal Motor Carrier Safety Administration (FMCSA)  just finished with their final rulemaking on Prohibiting Coercion of Commercial Motor Vehicle Drivers. Just like most regulation, the intentions are noble and good. The idea is to preempt a driver from being threatened to operate in either a dangerous or illegal way that might create crashes that hurt the general public. And like most regulation, the lack of definitive rules relative to what is and what is not coercion must have the plaintiff lawyers chomping at the bit.

So what is the new rule? The regulation now prohibits motor carriers, shippers, receivers and transportation intermediaries from coercing drivers to operate their commercial motor vehicles in certain violations of Federal Motor Carrier Safety Regulations. These violations include:

• driver's hours-of-service limits
• commercial drivers license regulations
• drug and alcohol testing rules
• hazardous materials regulations

As we are focused on the truck brokers and their operational best practices, does this mean that a truck broker needs to ask if the driver has enough hours, when they had their latest drug and alcohol test, or if the haul would cause any violation of their commercial driver's license regulations? Who knows?  God forbid, the truck brokers now have to certify all haz-mat regulations  have been properly vetted. It's even worse. Here is why:

The rule now includes procedures for drivers to report incidents of coercion to the FMCSA, and establishes rules of practice that the FMCSA will follow in response to reports of coercion. It describes penalties that may be imposed on entities such as truck brokers that have been found to have coerced drivers.

Do you think a carrier and its driver might, in an effort to deflect or escape liability and culpability, suggest that the truck broker "coerced" them to operate illegally? Absolutely.

While certainly anyone coercing a driver to do the wrong thing is blameworthy, not coming up with the rules or practices of how to operate- especially for a truck broker operating as a supply chain intermediary- should be construed to be federal regulatory malfeasance.

Coercion complaints must be filed within 90 days of the alleged event. A fine of $16,500 can result but that is the tip of the iceberg. What if the coercion results in a fatality according to the plaintiff's lawyer?

Needless to say the reaction to this will result in the establishment of case law relative to coercion precedents- along with the new need for a new term- Coercion Risk Management Best Practices. I wish everyone good luck and an extra bottle of aspirin or something a tad stronger....