MacMillan-Piper, Inc. v. Washington State Employment Security Department
AdministrativeLaw Arbitration SocialSecurity DueProcess Securities
Whether Washington's statute defining independent contractors for unemployment compensation taxes preempts the Federal Aviation Administration Authorization Act's broad preemption of state action relating to carrier prices, routes, or services
QUESTIONS PRESENTED 1. The Federal Aviation Administration Authorization Act, 49 U.S.C. § 14501@(1), “FA”) broadly preempts any state action that relates even indirectly to a carrier’s prices, routes, or services. Washington State’s statute defining independent contractors for unemployment compensation taxes, Wash. Rev. Code § 50.04.140, makes it impossible for such independent contractors in the trucking industry (owner/operators) to ever be anything but trucking carriers’ employees. Such a reclassification eliminates an established business model in that industry. Is such a reclassification scheme preempted by the FA, given its direct and indirect effects on prices, routes, and services of trucking carriers? 2. 49 C.F.R. § 376.12 regulates the relationship between trucking carriers and owner/operators, specifically providing in C.F.R. § 376.12(c)(4) that compliance with the federal requirement of exclusive carrier possession, control, and use of owner/operator equipment during the duration of the parties’ equipment lease may not affect whether an owner/operator is an employee or independent contractor under state law. Are courts barred from considering federally-mandated lease contract provisions in determining carrier control over an owner/operator for purposes of unemployment compensation taxation?