RULES FOR SUSPENDED PERMITS, NEW INSURANCE PROGRAMS, AND...

A REVIEW OF WRITTEN LEASE AGREEMENTS

By Wayne Schooling

Q: I heard that if my Motor Carrier Permit is suspended I can still operate because I am appealing the suspension. Is that true?

A: No, that is totally false. Section 34623 (d) of the California Vehicle Code allows for an appeal, which will be held within a reasonable time but not longer than 21 days after DMV receives your written notice. At the hearing, you must show just cause why the suspension should not continue. During this time, you may not legally operate. If you are caught doing so, your vehicles could be impounded, you could be fined, and you could go to jail.

SUCCESS STORIES

You’ve all heard the saying, “If it’s too good to be true, it isn’t.” Well, I’m here to tell you that for once, that’s not so. NTA's New Year's present to 10-4 readers is the best occupational accident program you'll find, which starts at only $86 per month.

NTA is also proud to announce that because of their huge growth this year in membership, they have acquired many new low-cost health discount programs, such as Medica Latina, which has coverage in the U.S. and Mexico. There is no reason you should be without any health insurance. Because intermodal trucking pay rates are so low, NTA targeted this group so that even they could qualify. Rates for NTA members start so low you just won’t believe it. Call our insurance department directly at (562) 808-2258 for more information.

WRITTEN LEASE REQUIREMENTS

I received an e-mail from an operator named John in Minnesota who had been working for a carrier in that state. After one month, they owed him $7,000 and all he had received was lip service when it came to payment. It was only after he wrote to the attorney general’s office with a complaint that they started to pay him. This leads me to believe that there are many drivers (as well as owner operators) who do not have the foggiest idea that there are actual written rules that govern the lease they are working under. So to start 2003 out right, I want everyone to reacquaint themselves with the rules that they should be working under.

You'll find the written lease requirements at www.access.gpo.gov/nara/cfr/index.html (search under 49CFR376). The motor carrier’s lease must adhere to and perform by these lease provisions. In fact, last year a U.S. Appeals Court ruled that owner operators have the right to sue motor carriers that don’t comply with federal leasing regulations. If you don’t have a copy of 49CFR Part 376, Lease and Interchange of Vehicles, get it and review it against your current contract.

A federal judge recently ruled that leasing arrangements between Missouri-based Ledar Transport and its drivers violated federal truth-in-leasing regulations. The judge cited more than 30 violations, mostly related to terms of payment and the company’s failure to properly disclose owner-operators’ rights. What makes this case interesting is that it is the first case based strictly on evidence that the carrier’s lease was not in compliance with the current leasing laws.

Here are just some of the provisions the court found to be improper at Ledar: An “early termination fee” is a penalty imposed by the carrier, unrelated to actual costs involved with the operation of leased equipment and is therefore illegal; Amounts deducted from escrow accounts must be specified in the lease; The regulations mandate payment to owner-operators within 15 days of submission of documents necessary for payment for the load and of driver’s log books (carriers can withhold final payment only for failure of the owner operator to return identification devices to the carrier); Amount to be paid by the carrier for the equipment and drivers’ services shall be clearly stated on the face of the lease; Carrier cannot set time limits on the submission of required delivery documents or other paperwork; The time, date and circumstances of the lease end must be specified.

There are about ten more items the judge cited for not being included in Ledar's leases, but space restricts me here. What I have tried to do is point out the most important issues. When you sign on to a motor carrier always remember you are there to lease your truck and your services to the motor carrier – you are not there to start an escrow fund, a maintenance fund, a fuel tax or licensing account, or to buy any insurance of any kind. These items should be made available to you only for your convenience.

I see too many e-mails and letters and receive too many phone calls from owner operators who say they have to use their carrier's insurance (whether it be liability or so-called workers’ comp) to work there. I say walk away. There are just too many carriers out there who are short of drivers who will treat you right and who will pay you on time (and sometimes these are not necessarily big carriers). I know quite a few small to medium carriers who would fit the bill perfectly.

I also hear quite often that some carriers demand that owner operators take a deduction for certain products and services (i.e. workers’ compensation, etc.). Section 376.12 (i) of the lease requirements (which covers “Products, equipment, or services from authorized carrier”) clearly states, “The lease shall specify that the lessor is not required to purchase or rent any products, equipment, or service from the authorized carrier as a condition of entering into the lease arrangement.” That sounds pretty cut-and-dry to me.

Remember, know the rules first then read and understand your lease before you sign it. This will save you a lot of headaches farther on down the road. Once again, get a copy of the current written lease requirements and read them carefully. If you don't know the rules, you are a target just waiting to be taken advantage of. Don't let that happen!