Owner-Operator Rights: The Truth-in-Leasing Law

In 1977, the Interstate Commerce Commission raised substantial concerns about abuses against drivers in the transportation industry. The Commission found that carriers were entering into agreements to pay drivers but then taking substantial deductions to that pay through chargebacks. This left drivers open to abuses by carriers. The Commission therefore created federal leasing laws to protect drivers generally known as the “Truth-in-Leasing” laws.

Under the Truth-in-Leasing law, anytime an authorized carrier transports goods in equipment it does not own (ex: it hires an owner-operator), that carrier must comply with the provisions of 49 CFR 376.12. In general, this regulation requires carriers to provide a written lease to the owner-operator. Further, the law grants owner-operators some significant rights:

1. To know how the pay is determined;
2. To know in advance what deductions will be applied and the amounts;
3. To not have to be forced to purchase goods or services from the carrier;
4. To receive prompt pay;
5. To receive documentation to verify the pay.

This is just a summary of the rights granted to owner-operators. An owner-operator should review the full text of the law. Additionally, many of the precise regulations have been the subject of court challenges. Therefore, to gain a clearer picture of these laws, one should evaluate both the text of the law and court opinions interpreting the law.

What Happens if a Carrier Violates a Driver’s Rights?

Federal law, 49 USC 14704(a), allows owner-operators to exercise their rights under the Truth-in-Leasing laws. To do so, a driver can file a lawsuit with the court to:

1. Ask for injunctive relief–meaning the court would order the carrier to stop engaging in an unlawful practice.
2. Recover actual damages for violations.

In addition, where a driver prevails in the action, the court must also require the carrier to pay the driver’s reasonable attorney’s fees and costs incurred in the lawsuit. The owner-operator may also have additional rights under state law.

Help is Available

Every owner-operator should consider joining the Owner-Operator Independent Drivers Association (OOIDA). The OOIDA may be able to help you understand your rights as an owner-operator.

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