OOIDA: Brokers’ transparency regulation claims are ‘misleading and insulting’

In comments submitted to the Transportation Intermediaries Association’s petition to eliminate transparency regulations, the Owner-Operator Independent Drivers Association dispelled misleading information about the issue of broker transparency.

On Jan. 25, OOIDA submitted comments to docket  number FMCSA-2020-0194, “Petition for Rulemaking: Transportation Intermediaries Association; Property Broker Transaction Records and Regulatory Guidance Concerning Dispatch Services.” Essentially, the broker association wants the Federal Motor Carrier Safety Administration to get rid of the regulation that calls for transparency, 49 CFR 371.3(c).

In its comments, OOIDA claims that the Transportation Intermediaries Association has been using “misleading and insulting arguments” to refute its petition calling for more broker transparency. OOIDA states this is an attempt to distract from the systematic evasion of transparency regulations by brokers.

“(The Transportation Intermediaries Association) continues to overcomplicate a remarkably straight-forward concern,” OOIDA states. “Truckers want brokers to reasonably comply with existing federal regulations. They’re not asking for anything more than their right to transparency, which is used to help them differentiate good brokers from unscrupulous ones. OOIDA’s recommendations to ensure compliance with 49 CFR § 371.3 (§ 371.3) are not attempts to control rates, as TIA contends, nor do we have mischievous purposes in mind for proposing them.”

Transportation Intermediaries Association’s Defend Trade Secrets Act claim

OOIDA addressed the Transportation Intermediaries Association’s claim that federal transparency regulations are inconsistent with the Defend Trade Secrets Act. That act allows companies to sue in federal court if their trade secret related to interstate commerce has been misappropriated.

Brokers claim that divulging rate information subjects them to lawsuits under the Defend Trade Secrets Act. However, OOIDA contends that those claims are unfounded.

First, OOIDA asks how shippers and brokers can lawfully contract away a third-party’s legal rights, as in the case of motor carriers not allowed to see rates. Second, the Association questions how shippers can claim trade secrets rights in information that a third-party carrier is entitled. Third, nondisclosure and confidentiality agreements with carriers can protect shippers’ rights. Lastly, such agreements are consistent with the regulatory transparency requirement, which addresses the Transportation Intermediaries Association’s concerns.

The Defend Trade Secrets Act calls for civil action when information is obtained through “improper means.” OOIDA argues that brokers legally possess that information from shippers and are legally required to disclose that information to carriers upon request. Therefore, the act does not conflict with broker transparency regulations.

As OOIDA points out, Congress’ intent when creating the act is to prevent foreign entities and company insiders from stealing trade secrets to harm U.S. companies. It does not apply to companies fulfilling obligations set by federal regulations.

‘Dispatch services’ and ‘broker’

In lieu of transparency regulations, the Transportation Intermediaries Association wants FMCSA to issue guidance regarding the definitions of “dispatch services.” OOIDA is skeptical that any such guidance would stop unauthorized brokerage services.

In the 2012 Moving Ahead for Progress in the 21st Century Act (MAP-21), Congress “identified clear and separate roles for motor carriers, freight forwarders, and brokers and required increased accountability between these entities and shippers,” OOIDA states.

“If TIA and other brokers resist complying with §371.3’s basic disclosure requirements, then why petition for registration of entities arguably operating as brokers? If TIA and other brokers oppose the rules protecting the public from brokers, then its petition can simply be viewed as an effort to eliminate their competition,” OOIDA said in its comments. “TIA decries the enforcement of an existing rule because it involves an areas of commerce, but it requests a rule to protect its members’ commercial interests.”

OOIDA does not oppose FMCSA’s effort to ensure the registration of persons conducting brokerage operations. However, the Association does believe that current definitions identifying “dispatch services” and “brokers” provide sufficient clarity.

In November, OOIDA submitted comments to the Transportation Intermediaries Association’s petition addressing other issues. For more about those comments, click here. LL