Punching In: Keeping Tabs on Lawsuits Challenging DOL’s IC Rule

Monday morning musings for workplace watchers.

IC Litigation Round Up|OSHA Boosts Employer Reporting

Rebecca Rainey: The US Labor Department is currently defending its new worker classification rule in five different courts across the country against legal challenges brought by business groups, freelancers, and trucking companies.

The regulation, which went into effect in March, outlines a six-part test to determine whether a worker should be classified as an employee who is protected by the Fair Labor Standards Act, or an independent contractor who’s in business for themselves.

The rule also canceled a simplified worker classification test finalized by the Trump administration, a standard that business groups preferred.

All of the cases allege the regulation—which generally makes it harder for employers to classify their workers as independent contractors—departs from the FLSA and goes beyond the agency’s authority in violation of the Administrative Procedure Act.

Here’s where the lawsuits currently stand:

Littman v. DOL: The DOL has requested a Tennessee federal court rule in their favor or toss out one of the cases brought by freelance writers Margaret Littman and Jennifer Chesak.

The agency argues that the freelancers lack standing to sue over the rule because they’ve failed to demonstrate how the rule would harm them, and instead made “speculative” and “broad assertions” about how the policy “might” affect workers in general. On the merits, the DOL argued in its April 19 motion to dismiss that the rule is within the agency’s authority and isn’t arbitrary and capricious because it’s consistent with the courts’ reading of the FLSA and years of case law.

“It cannot be arbitrary for the Department to defer to the wisdom and experience of the federal courts by adopting an analysis drawn directly from judicial precedent,” the DOL said.

In response, the freelancers argued in a May 1 filing that their injuries are a “predictable effect” of the policy change and that the DOL didn’t offer any evidence to rebut their claims of harm from the rule.

Frisard’s Transportation, L.L.C. v. DOL: A family-owned trucking company has appealed the denial of its request for a temporary restraining order to halt the IC rule to the US Court of Appeals for the Fifth Circuit. The Louisiana-based firm’s emergency TRO was initially denied on March 8 by the US District Court for the Eastern District of Louisiana.

DOL’s briefing in the district court case is due May 20.

The trucking company is due to issue its brief on the injunction request before the Fifth Circuit on June 17.

Warren v. DOL: In a separate case brought by another group of freelance editors and writers in Georgia federal court, the DOL is due to respond to their request for summary judgment by May 28.

The freelancers said in their April 29 filing that the classification rule relies on a broad interpretation of the law that conflicts with the 2018 Supreme Court ruling in Encino Motorcars LLC v. Navarro. In that case, the high court said exemptions to wage and overtime requirements should get a “fair reading,” a change from the court’s past practice of requiring exemptions to be read narrowly in employees’ favor.

Colt & Joe Trucking LLC v. DOL: The latest lawsuit brought by Colt & Joe Trucking LLC—the second such trucking company to sue over the IC rule—is still in the early litigation stages. The suit was filed on May 7 in the US District Court for the District of New Mexico, and DOL’s answer to the complaint is due June 28.

Notably, the case is the only one out of the five to argue that the new rule was issued illegally under acting Labor Secretary Julie Su, because she hasn’t been officially confirmed as head of the agency.

Coalition for Workforce Innovation v. Walsh: Briefing is also underway in the Coalition For Workforce Innovation’s revived legal challenge in the US District Court for the Eastern District of Texas, with the DOL due to issue its response in the case May 24.

The Society for Human Resource Management filed an amicus brief in support of the business groups challenging the rule, arguing that the rule “tilts” the worker classification analysis toward employee status, and creates less certainty for employers compared to the 2021 Trump rule.

“The 2024 Rule’s framework imposes an unweighted, vague, multi-factor balancing test that depends on the unlimited minutiae of individual circumstances, as well as the various interpretations of stakeholders from workers to businesses and from the DOL and to the courts,” the April 30 brief said.

Demonstrators hold placards during a protest at the Amazon fulfillment center in Shakopee, Minn., on Dec. 14, 2018.

Photo by Kerem Yucel/AFP via Getty Images

Bruce Rolfsen: The results are in on OSHA’s latest drive to require employers to provide the agency with more details on injuries and illnesses, and it initially looks like a successful effort.

Large employers sent the US Occupational Safety and Health Administration 858,336 reports on individual cases in 2023, according to the agency. OSHA had estimated it would receive about 766,000 reports by the March 2 filing deadline.

Summaries of each case are now posted on OSHA’s website.

This is the first year OSHA has mandated that large employers provide the agency electronic copies of incident reports, known in OSHA lingo as Form 301. Previously, establishments were only required to submit a one-page summary covering all cases during a calendar year, and that summary didn’t provide information on individual cases.

The new requirement applies to businesses with 250 or more employees and workplaces in OSHA-designated higher-hazard industries with 100 or more employees.

OSHA justified the filing requirement by highlighting how details on each incident would give the agency and researchers greater insight into worksite hazards.

Employers raised concerns, however, that unions and other worker advocacy groups would use the information to further their goals.

It didn’t take long for advocacy groups to dive into the data.

On May 16, the Strategic Organizing Center—a coalition of unions—released a report criticizing Amazon.com Inc.’s safety record, largely based on the data. According to that data, the center said that injury cases spiked whenever the online retail giant had a sales promotion, and during the Christmas holidays.

“SOC analyzed the timing of Amazon’s reported injuries in 2023 and found that injury levels spiked by as much as 59 percent around the company’s peak operational periods including Prime Days and the holiday shopping season kickoff in November,” it said.

Amazon spokesperson Maureen Lynch Vogel said the center was “selecting data that suits their narrative.” The center omitted the fact that there were far more people working at Amazon during those busy times—with more total hours logged—which impacted overall numbers, she said.

OSHA officials at a May 7 meeting of the National Advisory Committee on Occupational Safety and Health said they were happy with the initial results of the new submission push, and are looking to add more information to the database.

That could include a description of what a worker was doing before an incident and the accident itself, a description of the injury or illness, and the employee’s occupation, they said.

The agency isn’t proposing to release information that could identify individual workers, they said.

We’re punching out. Daily Labor Report subscribers, please check in for updates during the week, and feel free to reach out to us.