Leased owner-operators face threat in battle over independent contractor classification- by Todd Dills and Max Kvidera

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When New Jersey owner-operator Thomas Lemon leased to Arkansas-based Oakley Transportation last year to run long-haul, he was transitioning from six years pulling containers as an independent contractor with Container Port on a dedicated account.

As a shorter-haul intermodal driver, he’d stood on the trucking industry’s front lines in a battle that’s been brewing for years. At the heart of the matter is the legal distinction between employees and independent contractors.

Recently, considerable momentum has built behind the issue. In addition to stepped-up union organizing efforts among independent drivers at the ports and in other areas, two federal bills, one sponsored in 2007 by President Barack Obama when he was a Senator, have broached the subject. Also, some states have increased penalties for misclassification of independent contractors and targeted companies in industries where the misclassification problem is deemed rampant with new workers’ compensation requirements for ICs and other administrative hurdles. And given the current economic environment, with growth stagnant and government expenditures rising, some analysts and industry stakeholders suggest the long-haul sector may soon be on the defensive as carriers fight for their business models and thousands of leased owner-operators like Thomas Lemon try to preserve their livelihoods.

“You’ve got what is sort of an ocean wave building in 2007,” says transport attorney Frank Botta of Eckert Seamans Cherin & Mellott. “It’s getting larger in 2008, and you’re about to be overcome by a tidal wave because of the economic dynamics of today.”

On the crest of the wave
Carriers of all sizes are uncertain about what changes might be coming. Leased long-haul owner-operators, who in large part cherish the independent status of their businesses, are between a “rock and a hard place,” Botta says. They are not entirely sure what they should do to preserve their status relative to the motor carriers they haul for.