Update on Legal Action Against DOL IC Rule

As ICSA members will recall, several lawsuits were filed challenging the U.S. Department of Labor’s (DOL) independent contractor (IC) regulation enacted by the Biden Administration and the DOL’s Acting Labor Secretary Julie Su in early 2024. If left to stand, these regulations would penalize many ICSA members who are truly independent contractors.

Several cases are pending at the U.S. district court level as well as at the U.S. court of appeals level.
American Trucking Associations’ IC Committee staff notified ICSA and other committee members that DOL is notifying lawyers litigating these cases that it plans to reconsider the 2024 Rule and may issue a notice of proposed rulemaking rescinding (repealing) the regulation. As such, DOL wants to pause the litigation to “reconsider” the rule because, in the words of ATA staff “the agency’s reconsideration and potential rescission of the rule will likely bear on the issues presented in [these cases].” In other words, if DOL rescinds the rule, the litigation becomes moot.

Earlier this week, the U.S. Court of Appeals granted a DOL motion to pause the case pending there; other courts are expected to do the same. This is the first good news on the IC issue, indicating that the Trump Administration is actively pursuing a “reset” on the IC issue. For some brief background on how the current rule came to pass, see below.

Su brought her liberal California attitude with her to Washington D.C. From 2011 to 2018, she headed the California Labor Commission, including oversight of California's Division of Labor Standards Enforcement (DLSE) under then-Governor Jerry Brown. From 2019 to 2021, Su was California Governor Gavin Newsom’s Labor Secretary. During Su’s tenure, California implemented an independent contractor rule that makes it extremely difficult for a truck driver or small fleet owner to be in business for themselves.

Su left California behind but pushed to enact a California-type independent contractor rule at the federal level and succeeded in doing so during her tenures as U.S. Deputy Secretary of Labor and acting Secretary of Labor from July 17, 2021 to January 20, 2025. President Trump nominated Lori Sanchez-DeRemer as Secretary of Labor soon after taking office. Sanchez-DeRemer is a Republican who enjoyed strong union support in her congressional distract.