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Recent Challenges to the Use of Hair Follicle Drug Testing

Without question, the trucking industry must do all it can to make sure its drivers are drug-free. However, employers must establish policies and procedures that recognize the diversity in the work force and the need to be flexible in the types of drug tests it administers to drivers and applicants. Hair testing is very effective in detecting drugs but should not be used as an end all for all applicants and experienced drivers. The National Minority Trucking Association reports that of the 3.5 million truck drivers in the United States, 1.5 million are minorities. As demands for new drivers increases, minorities are increasingly entering the profession. In addition, employers seek to retain experienced drivers. Recent court cases and EEOC settlements point to the need for those wishing to hire and retain minority drivers to have flexibility when it comes to the types of drug testing used on minority drivers and candidates.

Race-Based Challenges to Hair Follicle Testing

A recent decision from the United States District Court of Appeals for the First Circuit revived a lawsuit filed by eight police officers, a cadet, and a 911 operator. All are African American. All tested positive for cocaine after a hair follicle test was administered by the Boston Police Department. This was the second time the First Circuit found that the hair follicle test had a statistical disparate impact on African American officers in violation of Title 7 of the Civil Rights Act of 1964.

Title 7 prohibits employers from utilizing “employment practices that cause a disparate impact on the basis of race,” unless those practices are justified by business necessity. A disparate impact claim can succeed even when the employer did not intend to discriminate against persons in a protected class. The Boston Police Department’s officers and cadets had been subject to annual hair follicle drug tests. When the testing agency reported that a sample tested positive for cocaine, a physician chosen by the department checked to see if the individual had been administered certain medications during a medical procedure. If not, the individual could elect to have a “safety net” test of a different hair sample. The safety net tests were much more sensitive than the initial tests in detecting the presence of cocaine and its chemical by-products.

Plaintiffs challenged the reliability of hair testing. They pointed out that the federal government has refused to authorize hair testing in drug screening of federal employees and employees of private industries for which the government regulates drug testing. Plaintiffs argued that black individuals have higher levels of melanin in their hair and that causes cocaine and cocaine metabolites to bind to the hair at higher rates. If someone snorts or smokes cocaine its “aerosolized powder” will deposit on any nearby surface, including non-users hair. These deposits cannot be distinguished from the effects of actual use by current hair testing methods.

The plaintiffs also pointed to statistics kept by the department over a seven-year period. The statistics showed that out of 4,222 blacks that were hair follicle tested, 55 were positive. That compared to 10,835 whites being tested and 30 being positive. This resulted in a standard deviation of 7.14. The court acknowledged Mark Twain’s quip that there are three kinds of lies: lies, damned lies and statistics. However, the statistical analysis provided by plaintiffs provided to the court that “…we can be almost certain that the difference in outcomes associated over race over that period cannot be attributed to chance alone.”

The court then discussed whether the testing was job related. The court readily agreed that the hair test was job related since abstention from drug use was an important element of police behavior and that having a work force that did not consume drugs was a legitimate business need for the department. It noted that there was no reason why a test need be anything near 100% reliable – as few tests are – to be job related and consistent with business necessity. However, the disparate impact claim of the plaintiffs survived if they could show that an alternative test would decrease the chances of impacting innocent officers. Plaintiff’s suggested that those who had a positive hair follicle test go through a series of random follow up urinalysis tests in order to reduce the number of experienced officers being terminated and recruits being denied the opportunity of joining the force. The court found that a jury could agree with that approach and ordered that the suit go forward.

Religious Challenges to Hair Follicle Testing

In a charge filed with the EEOC, four East Indian Sikh applicants challenged J.B. Hunt’s drug testing policy. The policy required applicants to provide a hair sample for follicle testing. One of the five Articles of Faith for a Sikh is to maintain uncut hair. The Sikhs sought a religious accommodation, but were denied by J.B. Hunt. Though other testing methods were available, J.B. Hunt elected to require hair follicle testing, arguing that hair follicle testing was more accurate – and therefore more likely to assist in the company’s compliance efforts in having a drug-free driver force – than other methods.

The EEOC found reasonable cause to believe that Hunt failed to accommodate the Sikhs’ religious beliefs and effectively failed to hire a class of individuals due to race, national origin and religion in violation of Title 7 of the Civil Rights Act of 1964. The EEOC believed that alternate testing methods were a reasonable accommodation for the Sikhs, even if marginally less accurate than hair follicle testing. Hunt agreed to pay $260,000 and extend unconditional offers of employment to the complainants. In addition, it agreed to designate an EEOC consultant, develop written policies and procedures, and conduct training for all employees participating in the hiring, compliance, and grievance process.

These cases highlight the need for trucking companies to balance their responsibilities of keeping a drug-free driver corps while also respecting the rights of their diverse applicants and employees. Though hair follicle testing is common in the industry, it is important to note that there are some situations where trucking companies need to be flexible in its use.

This post was written by Doug Heise of Heyl, Royster, Voelker & Allen, P.C.

Read more at the National Law Review’s Transportation Page.

Uber Hack – Don’t Tell Anyone!

It’s been revealed that Uber’s database has been hacked, with the personal information of more than 57 million users and drivers worldwide compromised. That’s a big number, but we are becoming increasingly numb to this kind of revelation, with all the cyber-leaks now making the news. What was the more astounding aspect of this particular incident is the fact it has taken Uber over a year to reveal the security breach – with the attack taking place in October 2016.

Uber says that the hackers were able to download files containing information including the names and driver’s licence numbers of 600,000 drivers in the US, as well as the names, email addresses and phone numbers of millions of users worldwide.

Although Uber has now taken steps to notify the drivers affected by the hack, it’s reported that at the time of the breach, the company paid the hackers USD100,000 to delete the stolen data, and not reveal the breach.

In a statement, Uber CEO Dara Khosrowshani admitted that he became aware of the “inappropriate access [of] user data stored on a third-party cloud-based service” late last year, and that steps were taken to secure the data, and shut down further unauthorised access. However, Mr Khosrowshani noted he has no excuse as to why the massive breach is only being made public now.

For their roles in the cover-up, Uber chief security officer Joe Sullivan and his deputy have been ousted, while Uber says it’s taking “several actions”, including consulting the former general counsel of the US’ National Security Agency to prevent a future data breach.

For more legal analysis, go to The National Law Review

Automotive Supplier Industry Experts Convene in Detroit and Share 2018 Outlook

The Original Equipment Suppliers Association (OESA) held its 19^th Annual Conference this week in suburban Detroit under the theme: “The Industry’s New Landscape.” And while much of the day was devoted to autonomous vehicle developments and the potential negative impacts on the industry’s North American competitiveness that would result from substantial changes to NAFTA, the afternoon session included a robust discussion of today’s strong market in North America and the more guarded outlook for 2018 and beyond.

During this session, Mike Jackson, Executive Director of Strategy and Research for the OESA moderated a panel called “Cycle Dynamics: The Industry Outlook Panel,” comprised of a leading automotive forecaster, a leading Wall Street analyst and the lead economist for one of the world’s largest OEMs. While the panel remained fairly optimistic about the near term, the longer term theme was that the automotive industry is cyclical and the next down cycle is SOMEWHERE OUT THERE …

The panelists included Dr. G. Mustafa Mohatarem, Chief Economist, General Motors; John Murphy, Managing Director, U.S. Autos Equity Research, Bank of America Merrill Lynch; and Michael Robinet, Managing Director, Automotive Advisory Services, IHS Markit.

Dr. Mohatarem began with a very optimistic evaluation of the global economy, referring to our current condition as a “global synchronous expansion.” Not only is the U.S. economy strong, but China’s growth has exceeded recent expectations, the EU has experienced a mini-boom after dodging a debt crisis, India continues to grow steadily and Russia and Brazil’s recessions have ended. He noted that the current U.S. production rate is 17.4 -17.5 million units for 2017, a healthy market if not quite as healthy as last year. On the cautionary side, he noted a potentially more hawkish bent to Fed policy and a significant labor shortage that will continue to dog the U.S. automotive industry. On the whole though, he noted: “this is a very favorable time for the global automotive industry.”

Mike Robinet summed up current supplier sentiment as follows: suppliers see the demand and the market opportunities out there, but there will be a lot of disruptors that can derail them. These disruptors include the impact of “ACES” (Autonomous, Connected, Electrifiedand Shared), the emergence of “Super Tier 1’s” who may dominate the future landscape with their integration capabilities (leaving other suppliers behind potentially), shifting trade winds, indecision about U.S. regulatory policy including CAFÉ standards, and an acceleration of the planning cycle that creates execution risk. He noted that the cadence of model changes has kept the supply base on its toes this year, as has the adjustment to the continuing decline in sedan sales (which was viewed by the panel as a continuing trend into the future). Will the internal combustion engine disappear soon? According to Robinet, 95% of the vehicles in North America will have an engine on board by 2025. Places like China will see a faster adoption of EVs during this period, he noted, including as a result of government policies promoting them. He ended by cautioning suppliers not to focus too much on the “nirvana” of Level 5 autonomy, but rather to focus on the movement to Level 3 and 4 in the shorter term and try to find there place in those realms.

John Murphy, more bullish in recent times, conceded that he has “moderated his outlook a bit.” Murphy noted that leasing is helping support current demand, but worries about the upcoming impacts on the used car market as those vehicles come off lease (which he referred to as a “tsunami” that will hit in 2018 and beyond). He noted that vehicle pricing is also starting to moderate (unrelated to just mix), and that the CUV market is getting very crowded. He described three “Big Bangs” that will shape the industry in the future: The increase in the Efficiency of Travel (cost per mile), the impact of Autonomous Mobility On Demand on the ease and cost of travel, and the increase in Speed of Travel. Only the latter will provide a material economic stimulus – the first two will provide only a marginal or moderate stimulus – but all three Big Bangs will significantly impact the automotive industry. But, before these Big Bangs reach their full impact, Murphy sees a downturn within the next two years taking U.S. volume down below the 14 million unit level (compared to the miserable 9 million level reached during the Great Recession). During the Q&A session that followed, Murphy noted that he expects EV penetration in the U.S. to reach 10% by 2025 (slightly more optimistic than Mike Robinet’s prediction). He also noted his perception that we are not experiencing an auto technology valuation bubble despite the recent eye-popping valuations in this space (no irrational exuberance here!).

On the whole, the panel’s 2018 and beyond outlook is for an automotive supply industry in North America that continues to be good, with significant challenges and disruptors that must be overcome by those automotive suppliers who will flourish in the long term.

For more Public Services, Infrastructure & Transportation legal analysis, go to The National Law Review

Potential for more Trucking Accidents in California if New Federal Law Passes

A provision that is included in pending legislation in the U.S. House of Representatives may result in fewer truck drivers in California taking needed rest breaks while they are working. The bill would apply to truck drivers who drive into California from other states while exempting them from California’s mandatory rest break requirements. If this bill passes, truck drivers may be more fatigued and cause more accidents in both California and in the rest of the U.S.

The proposed law

A provision that is included in a House appropriations bill would exempt interstate truck drivers who drive into California from following the strict rest and meal break regulations in the state. Under California law, all workers, including truck drivers, must take one 30-minute meal break every five hours and one 10-minute rest break every four hours of work. Some other states, including Kentucky and Colorado, have similar rest and meal break laws on the books. Federal law only requires that truck drivers take one 30-minute break during the first eight hours of driving. Officials in California are concerned that reducing the amount of time that drivers spend resting may result in increased injury and accident rates in the state.

According to the Truck Safety Coalition, the legislators are attempting to preempt state labor laws that mandate additional meal and rest breaks beyond those that are required under federal law. While the law would apply to interstate drivers who drive into the state, some experts are also concerned that drivers who only drive within the state but who work for interstate trucking companies may fall into a legal loophole. They believe that their companies would likely pressure the drivers to only take the minimally required breaks under federal law instead of following the state’s requirements. The provision was introduced by two California Republicans, including Rep. David Valadao and Rep. Jeff Denham. Denham has received more than $60,000 in contributions to his campaigns from trucking organizations.

Drowsy driving truck accident statistics

In California, 15,000 large truck crashes happened in 2016. The California Highway Patrol reports that 8,989 of those collisions happened in Los Angeles. Nationally, the Federal Motor Carrier Safety Administration reports that 87,000 injury crashes happened in 2015, and 4,311 trucks and buses were involved in fatal accidents. The FMCSA reports that 55 fatal truck accidents in 2015 were caused by drowsy or fatigued truck drivers and another 71 were caused by driver inattention with unknown causes.

If the proposed law passes in the House and Senate and is signed into law by Trump, many truck drivers may not have to take the rest breaks that they currently have to take. Truck drivers drive for exhaustingly long shifts, and not being able to pull off of the road more frequently may lead them to become exhausted. In Dec. 2016, the AAA Foundation for Traffic Safety found that the crash risk for drivers spikes for every hour of sleep that they lose. Truck drivers who do not get sufficient sleep and who are also not able to take enough rest breaks may have greatly increased risks. For all drivers, AAA found that the risk of accidents doubles for people who get between five and six hours of sleep each night. When they only get four to five hours of sleep, their risks are four times higher of crash involvement than people who are more rested.

Pressures on truck drivers

Truck drivers report that they are under tremendous pressure by their companies to get their loads delivered on time, according to ABC News. When drivers are pressured to make their deliveries under tight deadlines, they may end up driving while they are fatigued. This pressure may compound the potential problems of having fewer rest breaks under the proposed federal law. If that law passes, it is likely that all interstate companies will force their workers to only follow the federal rules rather than pulling off the road more frequently or whenever they feel tired.

Drowsy driving can have serious or even fatal consequences for drivers and those who are traveling on the roads around them. Enacting federal legislation to preempt California’s meal and rest break requirements could lead to many more injuries and deaths in the state each year. Californians may want to lobby their representatives and senators about this provision in order to protect the general safety of everyone in the state.

This post was written by Steven M. Sweat.

For more legal analysis go to the National Law Review.

NAFTA: Mexican Trucking Program

President Trump’s plans to renegotiate the North American Free Trade Agreement (NAFTA) may also impact a controversial program that allows Mexican carriers to make long-haul deliveries in the U.S.

As part of the NAFTA agreement, the U.S. and Mexico agreed to allow trucks from each country to carry goods across the border for deliveries anywhere inside each of their respective countries, but the program faced challenges from the get-go. In 2007, the George W. Bush Administration launched a trial program to expand Mexico’s trucking operations beyond the border. However, the program ended in 2009 after Congress defunded the program following pressure from labor unions.

Following retaliatory tariffs imposed by Mexico, the Obama Administration established a new pilot program in 2011 that would allow long-haul operations in the United States by Mexican drivers, beyond the 25-mile “buffer zone” that allows U.S. truckers to transfer and begin transport of merchandise further into U.S. territory. U.S. labor unions objected but failed in their legal challenges against the program, and it was made permanent in January 2015. The International Brotherhood of Teamsters, together with other groups, sued the Department of Transportation in 2015 over a report that they argued was not based on sufficient data to allow for these long-haul deliveries. The program remains in effect while that case is still pending.

Safety has been one of the biggest concerns raised by critics of the program. However, a 2014 Congressional Research Service report suggests safety likely has less to do with whether the truck originates in the U.S. or Mexico, and more to do with the type of truck being used:

Drayage carriers, whose trucks make short-haul movements and spend much time idling while awaiting customs processing, tend to use older equipment. Long-haul trucks tend to carry relatively high-value goods or temperature-controlled cargo, because lower-value goods and less time-sensitive goods can be carried over long distances much more economically by rail or water. If shippers are willing to pay a substantial premium over rail or water transport to truck their product long distances, it seems plausible that they would choose a reliable trucker with modern equipment to avoid risk of delay or spoilage.

Opponents of the program are almost certain to call for its repeal as part of any new NAFTA negotiations. Representative Peter DeFazio (D-Oregon), Ranking Member of the House Transportation Committee, opposes the long-haul program and has already said he plans to raise the issue with Trump Administration officials.

ARTICLE BY Mayte Gutierrez of Squire Patton Boggs (US) LLP

Senate Commerce Committee to Hold Chao Nomination Hearing; President-Elect Trump Infrastructure Proposal Update; “Drones Over People” Rule Expected Soon

The Senate Commerce, Science, and Transportation Committee will hold a nomination hearing for Transportation Secretary-designate Elaine Chao. In addition to serving as the Secretary of Labor under President George W. Bush, she served as Deputy Secretary at US DOT under President George H. W. Bush, Chairman of the Federal Maritime Commission under Presidents Ronald Reagan and George H. W. Bush, Maritime Administration Deputy Administrator under President Reagan, and a White House Fellow at US DOT under President Reagan. Because of her experience in these positions, Elaine Chao will bring considerable substantive transportation knowledge and experience overseeing large organizations to bear as the Secretary of Transportation. We expect she will enjoy easy confirmation by the Senate.

Elaine Chao will likely be initially tasked with crafting and then moving Trump’s infrastructure proposal through Congress. In response to the Senate’s nominee questionnaire, Ms. Chao identified several issues that she would focus on as Secretary of Transportation. These included (1) effective enforcement of safety measures, strengthening US DOT’s planning and acquisition practices, and considering new technologies in infrastructure; (2) expediting the process of making repairs and building new construction and decreasing regulatory burdens; and (3) striving for equity between urban and rural areas and among modes of transportation.

Ms. Chao’s list of focus areas is so broad as to cover nearly all key functions of the Department of Transportation, so it does not provide significant insight into what her priorities as Secretary would be. However, there are a few issues we believe Ms. Chao will prioritize. These include regulatory reform, Buy America, and private sector innovation, such as support for autonomous vehicles to improve vehicle safety and for public-private partnerships to advance capital project more efficiently.

President-Elect Trump Infrastructure Proposal Update

Throughout the presidential campaign, President-elect Trump advocated for a large infrastructure investment package, however there are few details known about the proposal at this time. Trump initially said he would “at least double” Secretary Clinton’s $275 billion infrastructure proposal, and has at times called for un-named measures to support $1 trillion in infrastructure investment.

During the campaign, Trump associated himself with an infrastructure proposal drafted by Wilbur Ross, his nominee for Commerce Secretary, and Peter Navarro, recently named as the head of a new National Trade Council to advise the President on trade issues. The Ross-Navarro proposal would provide a tax credit to equity investors in infrastructure projects with the aim of attracting greater private investment in such projects and lowering project finance costs. The proposal relies on dynamic scoring to offset the tax expenditure. Revenues gained through tax reform (including one-time funding through deemed repatriation tax on overseas earnings) has been often cited as a viable pay-for for infrastructure funding, and many believe it would be difficult to fund an infrastructure package independent of tax reform legislation.

Because equity investors support a very small fraction of transit and highway projects – those with a dedicated revenue stream to pay back such investment – tax credits for equity investments are viewed by many transportation stakeholders as only a small part of the solution to our infrastructure investment gap. Stakeholders and even some Members of Congress have made clear that any infrastructure package must include grant funding in addition to finance tools.

Trump’s selection of anti-spending crusader Rep. Rick Mulvaney (R-SC) as the Director of the Office of Management and Budget appears to signal strong fiscal discipline by the next President – in any future infrastructure spending and across the Federal budget – so few expect Trump to propose a large stimulus-style spending bill like the one Congress and President Obama adopted in 2009. House and Senate Republican leaders have publicly stated there must be responsible methods of paying for any infrastructure spending.

With reauthorization of the FAST Act still a few years away, Trump’s still-developing proposal is likely to be seen by many transportation stakeholders as the best opportunity to advance their particular interests. While both Congress and the Trump Administration may have little appetite to take on difficult issues in what Trump has billed as a much-needed investment in America’s infrastructure and economy, some straightforward provisions are likely to travel on this bill. On a broader scale, any infrastructure package could also be an opportunity to secure a long-term revenue solution for the Highway Trust Fund (HTF). By the end of the FAST Act in 2020, HTF revenues will support only 55 percent of authorized spending from the HTF. So many transportation stakeholders view Trump’s large infrastructure investment bill as a well-suited vehicle to address this funding shortfall before the end of 2020. However, the Trust Fund’s systemic revenue shortfall has not become any easier to solve, due to: the growing size of the shortfall; bipartisan objections to raising the federal fuels tax; and little support for scaling back popular infrastructure programs.

While the President-elect prioritized infrastructure investment in his campaign, there are a number of potential impediments to successfully advancing a large infrastructure package. Congressional Republicans have recently identified reform of the Affordable Care Act, tax reform, and regulatory reform as the first proposals they will advance in the 115th Congress – not Trump’s transportation plan.

Another potential impediment is that an infrastructure package is simply not a must-pass bill: the FAST Act is in place until 2020. In 2017, the transportation committees in Congress will be focused on an upcoming Federal Aviation Administration (FAA) reauthorization deadline. The current FAA extension expires September 30, 2017, and reauthorizing aviation programs will likely be a priority for House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA).

One Congressional effort that would build support for infrastructure spending is the return of earmarks. The House is likely to vote on a bill early in 2017 that would reestablish earmarks. In the past, infrastructure bills often enjoyed enormous bipartisan support because many Members were able to secure direct funding for projects in their district or State through earmarking. At this time, it is unclear if earmark supporters have the votes to overturn the earmark ban.

Regulatory Activity

“Drones Over People” Rule Expected Soon

The Federal Aviation Administration (FAA) continues to work on a proposed rule allowing the operation of unmanned aircraft systems (UAS) over people, and has been expected to release the proposed rule before the end of the Obama Administration on January 20, 2017. The proposed “drones over people” rule will significantly expand allowable UAS operations, likely allowing the operation of UAS over individuals that are not directly involved in the operation of the UAS. After the “drones over people” rule is issued, FAA will focus on drafting a propose rule allowing beyond visual-line-of-sight operations. These newly proposed rules follow the final rule on the Operation and Certification of Small Unmanned Aircraft Systems, which went into effect on August 29, 2016.

This Week’s Hearings:

On Wednesday, January 11, the Senate Commerce, Science, and Transportation Committee has scheduled a confirmation hearing on the expected nomination of Ms. Elaine Chao to be Secretary of the United States Department of Transportation.
On Wednesday, January 11, the Senate Homeland Security and Governmental Affairs Committee has scheduled a confirmation hearing on the expected nomination of General John Kelly to be Secretary of the United States Department of Homeland Security.
On Thursday, January 12, the Senate Commerce, Science, and Transportation Committee has scheduled a confirmation hearing on the expected nomination of Mr. Wilbur Ross to be Secretary of the United States Department of Commerce.

ARTICLE BY Timothy W. Drake of Squire Patton Boggs (US) LLP

Obama Administration Announces Plan to Promote Electric Vehicles

In late July, the Obama administration announced a collaboration with 50 federal and state agencies, electric utility companies, vehicle manufacturers, electric charging station companies, and others in the private sector to promote faster development of electric vehicle charging infrastructure and increased numbers of electric cars on the roads.

This announcement, made in partnership with the Department of Energy (DOE), Department of Transportation (DOT), Environmental Protection Agency (EPA), Air Force and Army, comes just after the DOE’s first-ever Sustainable Transportation Summit. To learn more about the collaboration, continue reading!

This collaboration aims to promote consumer adoption of electric vehicles and increase the accessibility of charging infrastructure across the country. Major goals include:

Guaranteeing $4.5 billion in loans to finance a national network of electric vehicle charging infrastructure to increase consumer access;
Utilizing funds from the Fixing America’s Surface Transportation(FAST) Act, signed into law by Obama in December 2015, to identify zero emission and alternative fuel corridors and developing a 2020 vision for the optimal placement of fast charging infrastructure; and
Encouraging state, county, and municipal governments to partner with the Federal government to procure subsidized electric vehicle fleets.

Additionally, the collaboration has agreed to a set of Guiding Principles to Promote Electric Vehicles and Charging Infrastructure to encourage market growth and spur adoption of electric vehicles by developing vehicles and charging infrastructure that are accessible, affordable, reliable and convenient for consumers.

The market for electric vehicles has grown significantly in recent years, with battery costs falling 70%, more than 20 plug-in electric vehicle models now on the market, and more than 16,000 charging stations deployed – up from fewer than 500 in 2008.

ARTICLE BY Sahir Surmeli of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Lawmakers Continue Focus on TSA Wait Times, While House Spending Panel Approves TSA Funding for FY 2017; Government Officials React to Deadliest Shooting in US History, Worst Terror Attack Since 9/11

Lawmakers Continue Focus on TSA Wait Times, While House Spending Panel Approves TSA Funding for FY 2017

The House Appropriations Committee approved it draft FY 2017 homeland security appropriations measure on Thursday, June 9, including $7.6 billion for the Transportation Security Administration (TSA), $163 million more than in FY 2016 and $21.8 million greater than the Obama Administration’s FY 2017 budget request. The House Appropriations Committee has yet to approve a request from the U.S. Department of Homeland Security (DHS) for an additional $28 million to help keep airport security lines under control during the ongoing summer travel season. The Senate Appropriations Committee, which has already approved of its FY 2017 homeland security spending measure increasing funds for TSA, has also signed off on the reallocated funds, the second such request from DHS this year.

On June 7, the House of Representatives approved legislation, the Checkpoint Optimization and Efficiency Act of 2016 (H.R. 5338), aimed at shortening TSA wait times. The measure would direct both the TSA Administrator and the Government Accountability Office (GAO) to review TSA’s staffing allocation model. The Act also requires the TSA Administrator to take a number of actions related to the agency’s staffing and resource allocation. Across the Capitol, TSA Administrator Peter Neffenger testified before a Senate Homeland Security and Governmental Affairs Committee hearing last week, where lawmakers encouraged the agency to increase access to PreCheck, an expedited security screening program.

This Week’s Hearings:

Tuesday, June 14: The House Homeland Security Committee Subcommittee on Border and Maritime Security will hold a hearing titled “Overstaying Their Welcome: National Security Risks Posed by Visa Overstays.”
Wednesday, June 15: The Senate Homeland Security Committee will hold a hearing titled “America’s Insatiable Demand for Drugs: Examining Alternative Approaches.”
Thursday, June 16: The Senate Judiciary Committee will hold a meeting to consider pending legislation and nominations.

Executive Branch Activity

Government Officials React to Deadliest Shooting in US History, Worst Terror Attack Since 9/11

President Barack Obama, senior Administration officials, and lawmakers reacted to the shooting at a crowded Orlando nightclub filled with members of the lesbian, gay, bisexual and transgender community. As of Sunday night, the shooting, which ended with police storming the club after a three-hour stand-off, had left 50 dead and at least 53 injured. Reports indicated the alleged shooter had pledged allegiance to ISIS, making it the United States’ worst terror attack since September 11, 2001, and the deadliest mass shooting in the country’s history.

President Obama delivered remarks from the White House early in the day, confirming he had met with his homeland security and national security advisors and assuring Americans that he has “directed that the full resources of the federal government be made available for this investigation.” Congressman Mike McCaul (R-TX), Chairman of the House Homeland Security Committee, offered thoughts and prayers for the victims and thanked local law enforcement for their efforts responding to the attack, calling it “a sobering reminder that radical Islamists are targeting our country and our way of life.” Senator Ron Johnson (R-WI), Chairman of the Senate Homeland Security and Governmental Affairs Committee, echoed his House colleague, confirming that his committee “will work to support the federal role in investigating this terror attack and protecting against further threats.” Secretary of Homeland Security Jeh Johnson stated that senior agency officials “are dedicated to investigating this tragedy, along with the FBI and our state and local partners, and supporting the Orlando community in the tragedy’s aftermath.” Secretary Johnson canceled planned travel to Beijing in light of the attack.

ARTICLE BY Ludmilla L. Savelieff & Clark Kent Ervin of Squire Patton Boggs (US) LLP

Uber-Complicated: Insurance Gaps for Rideshare Vehicles Can Create Uncertainty for Passengers and Drivers

Many of us have come to enjoy the convenience of summoning a ride via our Smartphones with a rideshare service company such as Uber, Lyft, or Sidecar. However, significant issues exist over whether rideshare vehicles have adequate insurance coverage to compensate people injured in accidents involving those vehicles.

If one is injured by a Greyhound bus, for example, there is little question that Greyhound likely would have adequate insurance to cover any injuries and likely would have sufficient resources to compensate the injured party even without insurance.

By contrast, if one is injured by a rideshare driver, there are several potential obstacles to securing adequate compensation.

First, the rideshare company may classify the driver as an independent contractor instead of an employee, meaning that the company will not accept responsibility for the driver’s actions. Second, even if the rideshare company accepts responsibility, the company’s insurance may not provide coverage, as discussed below. In that event, the injured party is left to rely on the driver’s insurance, which also may be inadequate and may even exclude coverage for rideshare-related accidents.

The independent contractor issue has been litigated in numerous states with different outcomes. Uber currently is facing two class action lawsuits in California related to this issue: Ghazi v. Uber Technologies, Inc., et al., No. CGC-15-545532 (Superior Court of California, County of San Francisco) and O’Connor v. Uber Technologies, Inc., et al., No. CV-13-3826 (U.S. District Court for the Northern District of California).^[1]

Even if rideshare companies accept responsibility for a driver’s conduct, the companies typically have provided only limited insurance for their drivers. Specifically, rideshare companies typically have not provided coverage in the following two periods: (1) when the rideshare app is turned off, or (2) when the app is turned on but no passenger is in the vehicle.

But, a horrific accident involving an Uber vehicle helped to start changing this dynamic. Uber was sued in 2014 in California after a driver struck and killed a child during period (2) above, when he had his app turned on but had not yet picked up a passenger. The case is captioned Liu v. Uber Technologies Inc., et al., No. CGC-14-536979 (Superior Court of the State of California, County of San Francisco).

California and other states recently have started requiring rideshare companies to maintain some coverage for their drivers in period (2), but that coverage is limited. The companies typically provide contingent liability coverage with $50,000 per person/$100,000 per accident bodily injury coverage, but this insurance typically pays only for losses not covered by the driver’s personal policy.

And, even when rideshare company coverage is in place, insurers have relied on certain insurance policy exclusions in an effort to avoid paying claims. One insurer is currently making such arguments in the coverage dispute with Uber over the Liu settlement See Evanston Insurance Co. v. Uber Technologies, Inc., No. C15-03988 WHA (U.S. District Court for the Northern District of California).

If a rideshare company’s commercial insurance is inadequate to fully compensate an injured party, that person is left to rely on a driver’s personal insurance. But the driver’s insurance may be of no help because personal auto policies often contain an exclusion (the “livery exclusion”) for accidents occurring during commercial use of the vehicle, such as when a driver is transporting a passenger for hire.

Recently, there has been some effort in the insurance industry to close the insurance gaps discussed above, particularly during period (2), when a rideshare driver is using a mobile app but has not yet picked up a passenger.

In March 2015, the National Association of Insurance Commissioners adopted a white paper on insurance coverage for rideshare companies titled “Transportation Network Company Insurance Principles for Legislators and Regulators.” The paper recommends that rideshare companies provide full coverage for period (2) or that drivers purchase individual commercial coverage during that period.

Similar to California, legislatures in Colorado, Illinois, and Virginia have passed laws requiring rideshare companies to offer full insurance during period (2).

In addition, some insurance companies are offering products to rideshare drivers to protect them in the event that rideshare companies’ commercial insurance does not pay. For example, Geico (in Maryland and Virginia) and Progressive (in Pennsylvania) are offering individual commercial insurance to rideshare drivers that has lower rates than most commercial insurance. USAA (in Colorado and Texas) offers a commercial insurance policy to rideshare drivers for an extra $6 to $8 per month. Erie Insurance (in Illinois and Indiana) has removed an exclusion from personal auto policies purchased with a “business use” designation such that rideshare drivers now may be covered.

Overall, many options are emerging to provide additional insurance coverage on rideshare vehicles for the benefit of passengers and other third parties at all stages of the transportation process – from the time a rideshare driver turns on the app through the transport of a passenger. Passengers, drivers, and affected third parties should continue to monitor these developments to make sure they are adequately protected.

Article By Natalie A. Baughman of Gilbert LLP

_{[1] One consequence of the driver being classified as an independent contractor is that rideshare companies do not have to provide worker’s compensation insurance for a driver’s on-the-job injuries. The Ghazi case addresses whether Uber drivers actually are employees and thus Uber must provide worker’s compensation insurance.}

Could Train Control Technology Have Prevented the Amtrak Derailment?

An Amtrak train that derailed on May 12, traveling more than 100 miles per hour on a known dangerous curve, has an unfortunate similarity to the Spuyten Dyvil crash in December 2013. In that incident, a Metro North train traveling at 82 miles per hour derailed on a treacherous curve, traveling at nearly three times the allowed speed.

Four passengers died in the Spuyten Dyvil derailment. Operator fatigue was deemed to be the cause for that accident. This most recent crash killed at least eight people and eight are listed in critical condition. In both cases, National Transportation Safety Board (NTSB) experts contend that a safety measure called “positive train control” (PTC) could have prevented the disasters.

Robert Sumwalt, a member of the NTSB, explained during a press conference on Wednesday that Amtrak already has a system in place called the Advanced Civil Speed Enforcement System (ACES), which is installed throughout most of the Northeast Corridor. “However, it is not installed where the accident occurred,” Sumwalt said. “That type of a system, we call it a positive train control system, is designed to enforce the civil speed, to keep the train below its maximum speed. We have called for positive train control for many years, it’s on our most wanted list. Congress has mandated that it be installed by the end of this year.”

Sumwalt continued, “Based on what we know right now, we feel that, had such a system been installed in this section of track, this accident would not have occurred.”

He said that a thorough walk-through of the accident site was conducted yesterday and that investigators will be looking into the track, the train control signal system and the operations of the train. “Our mission is to not only find out what happened, but why it happened to prevent it from happening again,” he said.

The looming question is why this safety measure was not in place, even though PTC has been called for since a collision in Chatsworth, California killed 25 people. The Rail Safety Improvement Act of 2008 mandates that PTC for passenger and freight trains be operational by the end of 2015. But because of high costs and the complexity of the system, Congress has been considering an extension until 2020.

According to the NTSB website:

In the aftermath of the Chatsworth tragedy, Congress enacted the Rail Safety Improvement Act of 2008. The Act requires each Class 1 rail carrier and each provider of regularly-scheduled intercity or commuter rail passenger service to implement a PTC system by Dec. 31, 2015. Progress is being made toward this lifesaving goal. Metrolink became the first commuter rail system to implement PTC, when it began a revenue service demonstration on the BNSF Railway. This demonstration project is a step in the right direction, and Metrolink reports it will implement PTC fully throughout its entire system before the Congressionally-mandated deadline.

It has been more than 45 years since the NTSB first recommended the forerunner to PTC. In the meantime, more PTC-preventable collisions and derailments occur, more lives are lost, and more people sustain injuries that change their lives forever.

Yet there is still doubt when PTC systems will be implemented nationwide as required by law.

Each death, each injury, and each accident that PTC could have prevented, testifies to the vital importance of implementing PTC now.

ARTICLE BY Caroline McDonald of Risk and Insurance Management Society, Inc. (RIMS)

Tag: Transportation

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