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Electronic Logging Devices AMSA Safety and Operations Conference October 16, 2013 Presented by: Robert J. Henry Partner 1.

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Presentation on theme: "Electronic Logging Devices AMSA Safety and Operations Conference October 16, 2013 Presented by: Robert J. Henry Partner 1."— Presentation transcript:

1 Electronic Logging Devices AMSA Safety and Operations Conference October 16, 2013 Presented by: Robert J. Henry Partner 1

2 Electronic Logging Devices  Legislative and regulatory background  Information captured  Employment status of owner-operators  Driver privacy and harassment  Impact on accident defense  Establishing a Company Policy 2

3 Electronic Logging Devices  “A/K/A” AOBRs, EOBRs  Moving Ahead for Progress in the 21 st Century Act (“MAP-21”) – Mandates Electronic Logging Devices (ELDs)  Passed on June 29, 2012  Final rule by Oct. 2013; effective 2 yrs. Later  Who?  What?  When? 3

4 Electronic Logging Devices ELD Mandate  Who? Applies to all CMVs – any driver required to complete a log Affects all fleets, large and small  What? Carriers must use an FMCSA certified logging device Mandate applies only for tracking driver-compliance with Hours of Service rules  When? Mandatory ELD implementation not likely until late 2016 or early

5 Electronic Logging Devices  Latest regulatory agenda: “SNPRM” November 2013  Realistic expectation: Final rule in late 2014 to early 2015  Compliance two years later – late 2016 to early 2017  To contain: Minimum ELD performance standards Mandatory use by any drivers required to prepare logs Required HOS supporting documents Measures to ensure mandated ELDs do not result in harassment of drivers by motor carriers and enforcement officials 5

6 Electronic Logging Devices  Carriers are currently free to use “EOBRs” FMCSA stated that carriers are free to use EOBRs with GPS functionality, in advance of mandate FMCSA publicly disagreed with OOIDA’s position that carriers cannot use EOBRs as a result of 7 th Circuit decision overturning 2011 EOBR mandate  Current devices should meet requirements of current FMCSA “AOBR” regulation, 49 C.F.R. § (initially adopted in 1988) 6

7 Telematics Overview 7

8 Telematics  Using telecommunications devices to send, receive, and store information relating to remote objects, such as vehicles, including: GPS  Location, in-cab navigation, state by state records of miles and routes traveled ELD/EOBR  Logging and hours of service management Driver Performance  Acceleration, G-force calculations, collision detection, speed, braking pressure, fuel economy, hard cornering, sudden lane changes, diversions from trips, use of cell phones/communication devices while driving Vehicle Information  Maintenance information, engine malfunctions, Vehicle Inspection Reports, and vehicle maintenance reports Communications  Media management, trip management, in-cab document scanning, and messaging 8

9 Telematics  New Acronyms V2I,V2V,V2x M2M ADAS (Advanced Driver Assist Systems) CACC (Cooperative Adaptive Cruise Control) C-ITS (Co-operative Intelligent Transport System)  Ever-changing technology Increased Internet connectivity Smart phones and tablets integrated Maintenance improvements – “prognostics”  Predict engine or mechanical failures 9

10 Telematics  Costs Costs of technology itself continue to decline – 3G and 4G cellular replaced satellites  Data management Massive amount of data to track and analyze  Now recordable second-by-second and in sub-seconds Location data may give away competitive information  Retention for regulatory and litigation purposes Costly to maintain and costlier to retrieve Telematics 10

11 Telematics  Insurers beginning to use this massive data to develop accurate risk profiles and pricing Some insurers are acquiring existing telematics databases from vendors  Individuals’ privacy concerns Can be mitigated up front by employment agreement/ conditions of contractor lease  “Big Brother is watching” Regulatory uncertainty based on privacy interests of drivers The younger generation has already adopted telematics into everyday life and does not see privacy concerns as major obstacle 11

12 Telematics Limits of ELDs  Do not automatically capture validation of on-duty not driving hours  Do not assure proper recording of off-duty or sleeper berth time  Do not monitor “personal conveyance” time  Do not show who is actually driving the vehicle  Some devices: Management of “unassigned” time where the driver does not sign in Management of edits of data by the driver  Carriers will likely need backup “paper” systems to address system failures, new drivers, and other circumstances 12

13 Telematics and Owner-Operators 13

14 Telematics and Owner-Operators  ELDs, GPS, “black boxes”  Risks to Independent Contractor status  Potential violation of no-forced-purchase provision of Leasing Regulations 14

15 Telematics and Owner-Operators  Courts have not treated GPS monitoring as fatal to IC status  Several have upheld IC status despite evidence of GPS monitoring  However, GPS routing assistance may compromise IC status 15

16 Telematics and Owner-Operators  GPS monitoring may be defended as a customer-related service Carrier compliance with customer requirements may not be considered evidence of control But GPS monitoring may not qualify as “customer requirement” if no more than after- the-fact justification GPS monitoring designed to improve carrier’s service offerings may be neutral on IC status 16

17 Telematics and Owner-Operators  FMCSA has only approved GPS monitoring for recordkeeping/reporting purposes 2011 FMCSA rule (since overturned) mandated use of EOBRs equipped with GPS functionality - Likely repeated in new ELD rule But FMCSA has not approved real-time GPS monitoring, only use for recordkeeping and reporting purposes  Compliance-with-government-requirement defense not likely to be a winner 17

18 Telematics and Owner-Operators  Carriers should avoid offering GPS routing assistance to contractors and monitoring of non- regulated driving performance Contractors’ use of expertise in selecting routes is factor supporting IC status Providing GPS routing assistance to contractors makes this factor unfavorable If routing assistance is made available, contractors should be charged fee  Hard braking/sharp cornering etc. not violations 18

19 Telematics and Owner-Operators  Wilkinson v. Palmetto State Transp. Co. Holding: Holding: S.C. Sup. Court upholds IC status in WC context despite carrier’s GPS monitoring of contractor Take-Aways: Take-Aways:  GPS monitoring is not necessarily fatal to IC status, provided GPS assists customers’ freight tracking  No discussion of control due to carrier’s GPS mandate; may raise control concerns if carrier dictates details regarding buying, implementing GPS device 19

20 Telematics and Owner-Operators  Comm’r of Div. of Unemployment Assistance v. Town of Taxi of Cape Cod Holding: Holding: Mass. Ct. of App. Upholds taxi drivers’ IC status taxi company providing contractors with vehicles equipped with real-time GPS monitoring Take-Aways: Take-Aways:  IC relationship can exist despite GPS monitoring, provided monitoring is part of carrier’s efforts to match contractors with loads  Again, no focus on “control” in light of taxi company selecting, installing GPS device 20

21 Telematics and Owner-Operators  Wheeler v. BTI Special Commodities Holding: Holding: Iowa WC Comm’n upholds IC status of truck driver, stating in dicta that GPS monitoring is permissible if used to help carrier determine location of freight Take-Aways: Take-Aways:  Use of GPS monitoring may suggest an employment relationship; purpose of monitoring will determine the weight this fact is given by reviewing court or agency  Use could be addressed in “roll-out” notices explaining purpose of monitoring to contractors 21

22 Telematics and Owner-Operators  Wells v. FedEx Ground Package System, Inc. Holding: Holding: “Mo. Federal District court: “While governmental regulations may ‘furnish reasons for at least part of the control exercised’ over driver and vehicle appearance and vehicle suitability standards, FedEx’s requirements have been found to go beyond federal regulations.” Among bases for finding of “control” and employee status. (Decided Sept. 27, 2013) Take-Away: Take-Away:  Requiring ELDs before mandate may be used as evidence of “control” 22

23 Telematics and Owner-Operators  Requiring EOBRs Before Mandate Remedies for Non-Compliance – Require driver below predefined CSA thresholds (or agent) to pay for third party monitor, or to install EOBR  Position as implementation of carrier compliance  Source of much more information than needed for compliance 23

24 Potential for Violation Forced-Purchase Ban  “[T]he lease shall specify that the lessor is not required to purchase or rent any products, equipment, or services from the authorized carrier as a condition of entering into the lease arrangement.” (49 C.F.R. § (i))  Requirement that contractors purchase carrier- facilitated GPS units/software may violate Leasing Regulations  Applies to items purchased “through” (facilitated by) carriers, not just “from” them 24

25 Potential for Violation Forced-Purchase Ban  Approaches that may limit liability Assume cost of installing/maintaining GPS unit/ software (but risky to subsidize IC’s business) Permit alternatives to carrier-supplied units if at all possible - interoperable unit or direct OEM purchase Charge costs of unit to contractors (but document) Make software proprietary --but either don’t charge for license, or only pass-through actual costs to avoid making “profit” 25

26 Privacy/Harassment Concerns  Fourth Amendment OOIDA contends GPS monitoring violates 4 th Amendment – that it “reveals an intimate picture of the subject’s life” in violation of contractors’ privacy rights 42 U.S.C. § 1983 creates cause of action against private parties when they act “under color of any statute” (i.e., FMCSRs) Possibility is very remote - high burden in proving “state action” 26

27 Privacy/Harassment Concerns  MAP-21 requires FMCSA’s ELD regulations to address the “potential for driver harassment” Requirement applies to employee drivers and owner- operators Carriers may face liability under federal and state privacy protection laws if GPS monitoring used improperly Anti-harassment provisions in upcoming FMCSA rule would mean that violations can be the subject of private actions for damages under federal law (49 U.S.Code §14704) 27

28 Telematics and Accident Defense 28

29 The Risks Involved with Telematics in Accident Defense Litigation  A U.S. Department of Transportation memo issued on December 24, 2008, clarified its policy on the use of advanced information technology (GPS and other Telematics data), by stating: “Per 49 C.F.R. § each motor carrier must maintain records of duty status and supporting documents for each driver it employs for a period of six months. This now includes records from GPS and other advanced information technology systems.” 29

30 The Risks Involved with Telematics  The Policy went into effect immediately and pertains to positioning data, but not messaging data  The Policy adds a significant layer of document retention for motor carriers utilizing GPS and other Telematics  GPS and other Telematics records are now commonly requested and analyzed by plaintiffs’ attorneys in accident litigation 30

31 What are Plaintiffs’ Attorneys Looking for with Telematics Data?  Depends on facts of their case  Aggressive driving the day of loss/habits Speeding – history of speeding Frequent hard brakes/deceleration Use of cruise control – speeding Positioning – late for appointment delivery 31

32 What are Plaintiffs’ Attorneys Looking for with Telematics Data?  Other HOS violations Driver fatigue Cell phone or other mobile technology usage (cross-reference with cell records) Messaging while driving Diversions in trips 32

33 How is Telematics Data Used Against the Motor Carrier?  Telematics data is likely discoverable  Telematics data may be admissible at trial  Data is used to support amended pleadings Add claim of gross negligence Negligent entrustment of driver Negligent retention of driver Negligence per se – statutory violation Punitive damages may come into play 33

34 How is Telematics Data Used Against the Motor Carrier?  Data is used for settlement leverage Counsel shows strength of claims Counsel may dig deeper and request more records  High expense and time consuming given the massive amount of data produced by Telematics  Double-edged sword – depends on the data Early settlement negotiations/mediation 34

35 How is Telematics Data Used Against the Motor Carrier?  Data is used to paint picture for the jury Motor carrier follows unsafe practices Motor carrier does not properly train drivers Motor carrier does not discipline drivers Motor carrier does not monitor drivers Motor carrier does not follow its own protocols 35

36 Do the Benefits of Telematics Outweigh the Risks in Accident Litigation?  GPS and other Telematics traditionally used to track loads  Trend is increasing use to monitor drivers Compliance expense Risk of setting policy/protocols, but not following  Potential benefits are immense for fleets  If used properly, benefits far outweigh risks Set and follow through with monitoring policies 36

37 Using Telematics Data to Build Defenses  Prove speed  Prove positioning  Show safe driving habits  Confirm HOS compliance  Confirm no usage of mobile technology at time of accident 37

38 Practical Considerations  Be ready when your Telematics data is requested Know what data you have Know how to access the data Know how to interpret the data Know how to properly preserve the data Know how to use the data to reduce liability exposure 38

39 Company Policy on Telematics Company Policy on Telematics 39

40 Company Policy  Establish ELD/telematics policy for carrier Reflect independence of owner-operators For employees, coordinate with HR policies  Train relevant management  Distribute privacy-related disclosure and consent forms to all drivers  Consider using identified third-party vendor as clearinghouse for ELD/telematics data Data held by third party not carrier Removes carrier from technical functions 40

41 Company Policy  Establish a driver monitoring protocol/system – and follow it Some systems have options to notify carrier of violations – this technology is rapidly advancing  Create a driver notification and discipline protocol for HOS violations or evidence of aggressive driving Follow your policies/protocol Deviation from policy creates arguments for plaintiffs’ counsel where none may have existed before 41

42 Company Policy All Drivers  Describe devices  Describe data collected  Summarize responsibility for data Be specific about use of third party services (Name vendors) Where is information stored and who has access (carrier, vendor or both) Refer questions re data safeguards to vendors where applicable  Provide procedure for contractor or employee to request access to information 42

43 Company Policy Considerations for Owner-Operators  Some of the same considerations may apply to privacy/harassment issues for employee drivers  Productivity pressure on drivers from dispatch  Questioning drivers’ decisions to stop for whatever reason, or questions about particular stops  Multiple contacts from dispatch questioning why a driver is not moving  Reflect properly in ICOA: Define when and why ELDs and other telematics devices will be required, costs  Beware of admin fee or markup 43

44 Company Policy Considerations for Owner-Operators  Use tailored privacy-related disclosure and consent form  Avoid penalizing actions not violative of law (e.g., penalties for hard stops)  Focus should always be on compliance with government regulations and customer requirements –such as customer driven load tracking  Customer contracts and communications 44

45 Company Policy Considerations for Owner-Operators  Use to avoid need for discussions  Quick and easy way to review next available “work opportunity”  Focus information on status of delivery components and nothing else ► Ready status ► Ending trip ► Starting trip ► Trip complete ► Trip underway 45

46 Company Policy For Use with non-driver Employees  Train front-line communicators and their supervisors  List who has access to data — e.g., IT, safety, dispatch, and other legal-compliance personnel, company managers and legal counsel with a need to know  List specific uses of data—e.g., compliance with the Hours of Service Regulations and other Applicable Law  Integrate electronic information into guidelines for managing driver disqualification  Use electronic information in reward/penalty programs 46

47 Company Policy For Use with Driver and non-driver Employees  Describe prohibited uses by employees/management Specifically prohibit harassment Prohibit use to pressure drivers to exceed HOS limits  Coordinate with general HR policies (may vary by state) 47

48 Policy on Retention/Preservation of Telematics Data After Accident For Use with non-driver Employees  Fleet managers must understand the Telematics devices and their capabilities  Generally Create protocol for 6 month retention of non- messaging data as required by Federal Regulations Work with service providers to understand storage capabilities and options for retention of data Spoliation laws vary state-by-state, so policy must encompass legal considerations in lanes of travel 48

49 Policy on Retention/Preservation of Telematics Data After Accident For Use with non-driver Employees  After accident Create protocol for extended retention and preservation (up to statute of limitations)  Treat Telematics data same as logs and trip documents Follow your policies/protocols Litigation counsel advice Use care to preserve all data Greater attention to more serious accident Regulations are not the only consideration  “Companies shall exercise reasonable care in choosing retention periods … and … shall reflect past experiences, company needs, pending litigation and regulation requirements.” 49 C.F.R. § 379 Appendix A, Footnote A 49

50 Telematics Is Here To Stay  Those who deal well with issues will prosper  Carriers - CSA Compliance, predictive analysis of driver behavior and safety, efficiency  Increased use of Telematics information in insurance market  Increasing integration with other electronic information 50

51 ELD Benefits  Improved safety through real time monitoring of driver performance  Improved safety and savings in vehicle maintenance costs through real time preventative diagnostics and better communication regarding vehicle issues  Ability to use drivers who find it difficult to use paper logs and manually manage compliance with hours of service limitations  Operational savings through fleet optimization 51

52 ELD Benefits  Better customer service through enhanced information  Reduced payroll costs through automated safety management  Lower insurance premiums (auto, physical damage, workers’ compensation); lower cost of retained risks  Enhanced ability to dispute parking and speeding tickets  Better accident response through, e.g., rapid dispatch of emergency assistance 52

53 Bottom Line  Mandated ELDs are Coming  ELDs can be part of more elaborate telematics and information systems  Understand the ramifications  Manage the Risks  Significant benefits 53


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