The Trump administration has taken an action in federal court that could be the first step toward displacing the Biden administration’s independent contractor (IC) rule with its own version.
In a case involving several trucking companies as well as the Louisiana Motor Transport Association (LMTA) as plaintiffs, the Trump Justice Department has won a postponement from a federal appellate court of oral arguments that were to be heard this week.
Those arguments were appealing a lower court decision not to put an injunction in place that would have blocked implementation of the Biden IC rule.
“Due to the recent change in administration on January 20, 2025, there is new Department of Labor leadership,” the Justice Department said in its request to the U.S. Court of Appeals for the 5th Circuit, filed just four days after President Donald Trump took office. “These new agency officials are currently in the process of onboarding and familiarizing themselves with the issues presented in this case and related litigation.”
The court granted the request.
The lawsuit in question was brought in the Eastern District of Louisiana by Frisard’s Transportation LLC. Several other plaintiffs were added later besides LMTA: A&B Group Inc., Triple G Express, and Northlake Moving and Storage.
Lawyers: Trump will not defend the Biden rule
In a blog post about the action, attorneys Justin Barnes and Jeffrey Brecher of the Jackson Lewis law firm said what occurs next should not come as a surprise.
“It is unlikely the DOL will continue to defend the underlying merits of the rule,” the attorneys wrote. “The new administration will likely seek a stay of any further litigation in anticipation of further rulemaking rescinding the 2024 rule. The Trump Administration may then undertake new rulemaking to restore the 2021 rule or simply allow the courts to address the issue without agency regulations.”
The latest development marks yet another shot in the ping-pong game of the IC rule of the Wage and Hour Division of the Department of Labor that has been going on since the waning days of the first Trump administration.
That administration overturned an Obama-era rule with its own IC rule that was seen as making it more likely a worker would be classified as an independent contractor rather than as an employee. The Biden administration rule, formally announced just over a year ago, was seen as doing the opposite.
The Jackson Lewis blog cites several other ongoing lawsuits that had taken on the Biden IC rule. But no other cases have trucking companies as plaintiffs.
Biden’s attempt to kill Trump rule ran into court resistance
A quick withdrawal of the rule by the Trump administration might be legally problematic. The Biden administration did that early in its term, but that action was halted by a federal court, requiring the Biden administration to go through the entire normal federal rulemaking process to create its own standard.
The end result is ironic: Given that the Trump rule wasn’t even implemented until the final month of the first Trump administration, it was the Obama rule that was in place for most of Trump I. And given the court action against the Biden administration’s quick yanking of the Trump policy, and the more than two-year process to replace it, that Trump rule that was in effect for most of the Biden administration.
How important is the rule?
The IC rule is used by the Wage and Hour Division to help settle cases of worker misclassification. The question is just how much it matters.
Richard Reibstein is an attorney with Troutman Pepper Locke who specializes in independent contractor law. He writes a blog on the subject for his law firm.
When the Biden administration rule was announced, Reibstein was skeptical that the massive impact feared by its opponents would actually develop. “The legal impact of the final rule, however, will hardly ripple the waters,” he wrote at the time. “After all, it is the courts that create law on this subject, not regulatory agencies.”
In a November blog post, he returned to that theme. He said at the time that neither the Biden nor Trump rule had been cited by a “single federal court in determining IC status.”
“Only one court – a federal district court in Nevada – cited to the current regulation, and it essentially disregarded the regulation, concluding that the regulation was nothing more than ‘interpretative rules as a guide as opposed to a mandate.’”
However, since Reibstein wrote that, there has been a decision in a federal court in New Mexico with a carrier as the plaintiff. The decision by Judge Kea Riggs in that case discussed the Biden IC rule extensively.
While a legal action of Cole & Joe to overturn the Biden IC rule ultimately collapsed on Riggs’ decision that the carrier did not have standing to bring suit, Riggs also found that the rule was not “arbitrary and capricious.”
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