Federal Court: Motor carriers cannot charge owner-operators for ELD service

WASHINGTON DC - According to the U.S. Court of Appeals for the 10th Circuit, it is unlawful for a motor carrier to require an owner-operator to pay the motor carrier for the service fee of an ELD device. The court applied the prohibition on forced purchases in the federal Truth-in-Leasing rules, which provides:

(i)Products, equipment, or services from authorized carrier. The lease shall specify that the lessor is not required to purchase or rent any products, equipment, or services from the authorized carrier as a condition of entering into the lease arrangement. The lease shall specify the terms of any agreement in which the lessor is a party to an equipment purchase or rental contract which gives the authorized carrier the right to make deductions from the lessor's compensation for purchase or rental payments.

49 C.F.R. § 376.12(i). The “lessor” referred to here is the owner-operator who leases his or her truck and driving services to the motor carrier (the “lessee”). A full set of the Truth-in-Leasing rules can be found here.

In the TransAm case, the court held that:

TransAm violated § 376.12(i) because it required truckers to purchase a service—the use of TransAm’s satellite communications system—as a condition of entering into a lease arrangement. More specifically, TransAm required truckers to pay TransAm $15 each week to use TransAm’s satellite communications system, regardless of whether the truckers borrowed the hardware to access that system from TransAm or furnished it themselves. We agree with the district court that, while TransAm can require truckers to use a satellite communication system, TransAm “cannot under § 376.12(i) require its independent contractors to purchase or rent this system from it”“ “Instead, truckers “must have the option of obtaining equipment or services—including satellite communications services—from an outside source” (citations omitted).

The Court’s full opinion can be found here. In it, the court relies upon several other court decisions in prior cases that The Cullen Law Firm PLLC, brought on behalf of OOIDA and its members.In the typical unlawful forced purchase scenario, the motor carrier requires the owner-operator to purchase a good or service from the motor carrier, and then the motor carrier deducts an amount for the purchase from the driver’s compensation. Has a motor carrier charged you, an owner-operator, for your ELD and ELD service? We welcome you to tell us about it.