1st Commercial Credit

Learn About Funding and Supply Chain Finance Solutions, Business Tips, and Industry Related Articles.

Over 18 Years in Business

Recent Transactions

invoice factoring for a clerical staffing agency in texas

$350,000

Clerical Staffing Agency

invoice factoring for a invoice factoring for start up temp staffing company with 1 client

$100,000

Start Up Staffing Agency

Legal Issues in the Trucking Industry

For companies that provide transportation and shipping services, there are a number of issues that can raise legal concerns. Regulatory restrictions, health and safety risks to customers and employees, and other labor concerns are just a few examples of what can plague a profitable industry. Managing the day-to-day risks requires an understanding and legal representation to make proactive business decisions.

For many trucking companies, this begins with a written contractual agreement. Ambiguous language will leave trucking companies exposed to costly litigations. To achieve a properly worded contract, trucking companies should consider critical aspects:

• Words, terms and phrases with confusing language that could mean more than one thing must be identified. It is best to discuss and allay any concerns with potential customers before the contract is signed. Not only is this significant for current contracts, but future agreements will also be handled appropriately. • If both parties end up in litigation over a contract dispute, the court should be able to understand with clarity the original intent of the words, terms and phrases deemed ambiguous. Generally, the court will determine if the agreed upon meaning of the wording makes sense within the context and intended purpose of the contract. That is to say, the court should not have to compartmentalize words or phrases to determine the meaning. Instead, generally accepted business practices are used as a guide in addition to the original intent of the contract.

Even the best written contract agreements may not prevent some legal issues that trucking companies will face. However, educating and training for employees and management can help to build a line of defense when they are faced with a legal battle. Covering critical issues such as investigating an accident; response protocol for a catastrophic event; and, eliminating hostile working conditions will prepare companies. They will know, with assistance from legal advisors, to handle the following types of litigations.

Liability Defense in Third-Party Lawsuits

The potential for lawsuits can come against trucking companies on many different fronts, including customers, vendors and other providers. Situations may arise with contracts, disputes over business decisions. Customers may become dissatisfied with transactional decisions.

Defense of Workers Compensation and Other Third-Party Injury Claims

Occupational hazards are not uncommon in the trucking industry. Many companies may need legal representation to settle illness and injury disputes that could carry excessive costs. Federal and state workers compensation regulations can have a direct impact on trucking companies. Compliance with FMLA and unemployment insurance laws may create additional issues. Full compliance with these laws can help to build a strong and strategic defense when claims are filed.

Claims of Sexual Harassment and Employment Issues

Trucking companies are not immune to volatile issues such as sexual harassment claims. The nature of the business is to operate across broad geographic locations. As a result, this can expose companies to many challenges in making sure all employees understand and comply with employment laws.

Having polices in place to detect and prevent harassment on any level is critical to maintaining sound operations. If there is a legal dispute regarding harassment, trucking companies will need to comply fully with standards set by the National Labor Relations Board.

Recovering Losses from Negligent Third-Parties

There are situations where the negligence of a third-party causes trucking companies to suffer losses. Litigation is usually necessary to recoup those losses in an orderly manner. This could end with a favorable settlement or a full trial. Typically, companies will need to weigh the costs of litigation with the original financial damage.

Tort Cases

Trucking companies continue to be concerned with massive financial payouts that may come with a court settlement. Underlying this issue is a disconnect between negligence and financial liability of companies. Often, excessive lawsuit awards are unproductive and could serve to undermine some legitimate industry practices.

Privacy Concerns with GPS-Based Navigation

New on the horizon is privacy issues raised with technology expansion. On one hand, the use of GPS-based navigation systems can help to streamline deliveries and other processes within the trucking industry. On the other hand, legal issues may arise if employees question whether some data collection invades their right to privacy.

Tracking technologies are useful in the coordination of commercial fleets, untethered trailers and other important company assets. Operating costs can be significantly reduced by facilitating just-in-time delivery services without keeping large inventories. GPS or satellite based technologies are beneficial to trucking companies in more ways than one.

In the trucking industry, these technologies can also improve cargo security, provide precise position. Companies can calculate ETAs, route guidance, and report on load status and fuel tax mileage. Trucking companies have the ability to know with accuracy the location of fleets even without employee knowledge.

This creates a level of resistance from some truck drivers who claim that companies do not have the right to collect detailed information about their traveling habits. Proper evaluation of the legal merits of these claims will depend on several factors.

First, specific applications used for fleet and certain employees are important to consider. The business relationship between trucking companies and truck drivers is another factor. For example, whether drivers are union members, nonunion or independent contractors may grant them some level of autonomy. Local jurisdictions and laws may also factor into how tracking limitations are imposed.

Staying in front of these issues is the first line of defense for trucking companies that adopt location technology systems. Most companies have an advantage when countervailing considerations such as security and safety are applied. Ultimately, these business concerns may outweigh the perception of privacy invasion.

How Trucking Companies Can Avoid Liability

A good way to reduce risk levels for liability claims is to fully understand the nature of the cargo being transported. Valuable merchandise and hazardous materials must be handled with extreme caution. Likewise, protecting certain types of cargo from weather conditions and knowing expiration dates for perishable items are crucial practices.

Knowing the nature of cargo determines delivery schedules and how shipments are handled. Obtaining proper permits and certifications will also give trucking companies a position of strength against potential liability cases.

Generally, trucking driving is dangerous by nature. Add exhaustion or lack of training to hazardous road conditions and the risk for accidents increase. The number of fatalities involving large truck accidents increased 8.7 percent in 2010, according to the National Center for Statistics and Analysis.

Making sure that drivers follow good driving habits is very important to avoiding liability claims. The U.S. Department of Transportation and state licensing offices have set guidelines for the amount of training truck drivers must complete before getting behind the wheel. Trucking companies should maintain compliance with these rules at all times.

In some situations, trucking companies could attempt to avoid liability for driver accidents. Some companies created distance with the vehicle, equipment and driver. This is usually possible when they did not own the equipment and the driver was an independent contractor.

The argument is that trucking companies are not legally responsible for maintaining, inspecting and repairing equipment they do not own. However, trucking companies were not able to avoid some level of liability in every situation.

Conclusion

There are many different legal issues that the trucking industry may face throughout the course of business operations. Issues with employment matters, personal injury claims, labor disputes and vendor disputes could interfere with how effective companies can be with those operations. Experience is a teacher; developing an action plan and strategic line of defense is better to help prevent some legal challenges.

Compliance with federal regulations that control different aspects of the industry will help to keep trucking companies out of court. If and when litigation becomes necessary, it is best for trucking companies to have legal representation to overcome legal issues.