The Trump administration has initiated a federal court action that may serve as the initial move to replace the Biden administration’s independent contractor (IC) regulation with its own alternative.
In a case involving multiple trucking firms and the Louisiana Motor Transport Association (LMTA) as plaintiffs, the Trump Justice Department successfully requested a postponement from a federal appellate court regarding oral arguments scheduled for this week.
These arguments were related to an appeal of a lower court’s decision that declined to impose an injunction blocking the implementation of the Biden IC rule.
In its request to the U.S. Court of Appeals for the 5th Circuit—filed just four days after President Donald Trump took office—the Justice Department noted, “Due to the recent change in administration on January 20, 2025, there is new Department of Labor leadership. These new agency officials are currently in the process of onboarding and familiarizing themselves with the issues presented in this case and related litigation.”
The court approved the request.
This lawsuit was filed in the Eastern District of Louisiana by Frisard’s Transportation LLC and later included additional plaintiffs: A&B Group Inc., Triple G Express, and Northlake Moving and Storage, alongside LMTA.
Legal Experts: Trump Will Not Support Biden’s Regulation
In a blog post discussing the recent developments, attorneys Justin Barnes and Jeffrey Brecher from the Jackson Lewis law firm suggested that the upcoming actions should come as no surprise.
“It is unlikely the Department of Labor will continue to defend the underlying merits of the rule,” the attorneys stated. “The new administration is expected to seek a stay of any ongoing litigation in anticipation of forthcoming rulemaking that would revoke the 2024 rule. The Trump Administration may then initiate new rulemaking to reinstate the 2021 rule or allow the courts to resolve the matter independently of agency regulations.”
This latest action represents another chapter in the ongoing fluctuation of the IC rule from the Wage and Hour Division of the Department of Labor, a situation that has persisted since the final days of the first Trump administration. That administration replaced an Obama-era regulation with its own version, which favored classifying workers as independent contractors instead of employees. Conversely, the Biden administration’s rule, formally introduced just over a year ago, was perceived as promoting the opposite approach.
Biden’s Efforts to Overturn Trump’s Rule Faced Legal Challenges
A swift retraction of the rule by the Trump administration could pose legal complications. Although the Biden administration attempted this early in its term, a federal court intervened, necessitating that the Biden administration adhere to the full federal rulemaking process to establish a new standard.
This predicament is quite ironic: since the Trump rule was only implemented in the last month of his first administration, the rule that remained in effect for most of that administration was, in fact, the Obama rule. Furthermore, due to the court’s decision against the Biden administration’s prompt removal of the Trump policy, the Trump rule was essentially enforced for a significant portion of the Biden administration.
Significance of the IC Rule
The IC rule plays a critical role for the Wage and Hour Division in resolving cases of worker misclassification. However, its overall impact remains a subject of debate.
Richard Reibstein, an attorney at Troutman Pepper Locke specializing in independent contractor law, previously expressed skepticism regarding the potential extensive effects of the Biden administration rule. He noted, “The legal impact of the final rule, however, will hardly ripple the waters. After all, it is the courts that create law on this subject, not regulatory agencies.”
In a subsequent November blog post, he reiterated this position, mentioning that neither the Biden nor Trump rule had been cited by any federal court in determining IC status. Only one court—a federal district court in Nevada—referenced the current regulation but effectively dismissed it as mere “interpretative rules as a guide as opposed to a mandate.”
However, a decision by a federal court in New Mexico with a carrier as the plaintiff has arisen since Reibstein’s commentary. The ruling by Judge Kea Riggs discussed the Biden IC rule in detail. Although a legal challenge by Cole & Joe to overturn the Biden IC rule ultimately failed due to Riggs’ finding that the carrier lacked standing to litigate, Riggs concluded that the rule was not “arbitrary and capricious.”
