The Massachusetts Delivery Association (MDA) – a group representing 50 logistics and delivery companies across the Bay state – said it won a long-fought court case this week to regain the right to use independent contractors.
The group said the ruling by the U.S. District Court for the District of Massachusetts upholds the Federal Aviation Administration Authorization Act or “FAAAA” passed by Congress in 1994 that preempts state laws or regulations or any other provision having the force and effect of law “related to a price, route, or service any motor carrier.
According to the Littler Mendelson law firm, which represented the MDA in court, the purpose of the preemption clause in the FAAAA, similar to the Airline Deregulation Act (ADA), is to prevent states from enacting, either directly or indirectly, “a patchwork of state service-determining laws, rules, and regulations,” so as to “leave such decisions, where federally unregulated, to the competitive marketplace.”
Expressly excluded from preemption is the ability of a state’s motor vehicle “safety regulatory authority” to impose various motor vehicle safety regulations, the firm said.
“We are very pleased that the district court has enforced the will of Congress in the MDA case: that the transportation of product in the American marketplace by air and by ground is to be regulated by the federal government alone,” noted David Casey, co-chair of the Appellate Practice Group within Littler and MDA’s attorney.
Aaron Driben, MDA’s president, noted that the court’s ruling – which overturns a 2013 ruling to the contrary – allows its member companies to use independent contractors in the same day delivery market to both meet fluctuating customer demands for on-demand deliveries and to staff regularly scheduled deliveries.
“This ruling is a victory for everyone in the motor carrier industry that relies on independent contractors to satisfy fluctuating demand,” he explained in a statement. “Had the court’s 2013 ruling been affirmed, it would have had a severe impact on our labor costs and force many of our members to either increase their prices to consumers or go out of business.”