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TRALA & ATA Victorious in Oregon Owner-Operator Lease Model Case

Earlier this week, the Oregon Court of Appeals issued a series of opinions in a handful of cases involving motor carriers in Oregon.  In a case in which TRALA actively participated with the American Trucking Associations (ATA), CEVA v. Oregon Employment Department, the court ruled in TRALA and ATA's favor.  The case ruling can be viewed here.

Earlier this week, the Oregon Court of Appeals issued a series of opinions in a handful of cases involving motor carriers in Oregon.  In a case in which TRALA actively participated with the American Trucking Associations (ATA), CEVA v. Oregon Employment Department, the court ruled in TRALA and ATA's favor.  The case ruling can be viewed here.
 
The case involved the ability for motor carriers to enter into agreements with owner-operators who voluntarily "lease" themselves, along with a vehicle, to said motor carriers.  The Office of Administrative Hearings for the Employment Department originally ruled that owner-operators who had voluntarily leased themselves to CEVA Freight were employees, and not independent contractors.  If the initial ruling had not been overturned, CEVA Freight and other companies using the same business model would have had to pay Oregon unemployment tax on the compensation paid to the independent contractors.
 
The Oregon Court of Appeals ruled this week that the owner-operators who entered into agreements with a motor carrier in Oregon were properly classified as independent contractors under Oregon's four-part test and, therefore, the Employment Department's unemployment tax assessment, which was premised on the Department's determination that these owner-operators were employees, was erroneous. The Court rejected the Department's contention that the carrier's federal motor-carrier operating authority was a "license" needed by the owner-operators. Instead, the Court agreed with TRALA, ATA and the carrier involved that motor-carrier authority is a license needed by a motor carrier, and that the only type of license needed by an owner-operator is a commercial drivers' license or operators' license.
 
TRALA was involved with this case through the Scopelitis, Garvin, Light, Hanson & Feary law firm because some TRALA members lease trucks directly to owner-operators, who will then "lease" themselves to a motor carrier. TRALA also has member companies with logistics operations who at times lease owner-operators to haul freight, and TRALA wanted to ensure that its members could continue to conduct business as usual without worrying about governmental overreach and, subsequently, unexpected tax obligations that have the potential to end some business agreements.
 
You can view a copy of the TRALA/ATA amicus brief filed by Scopelitis here.
 
If you have any questions regarding this case, please contact Jake Jacoby at jjacoby@trala.org
 
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