Legal Challenge to 2024 Independent Contractor Rule Postponed

JacksonLewis reports that the US Court of Appeals for the Fifth Circuit has granted the Trump Administration’s request to postpone oral arguments in Frisard’s Transp., LLC v. United States Department of Labor, a lawsuit challenging President Biden’s 2024 independent contractor rule.

The Department of Justice filed a motion to pause proceedings to allow new leadership at the Department of Labor (DOL) to review the case and consider future actions.

The court accepted the motion, postponing the oral argument originally set for February 5, 2025. The case is now on hold pending further updates, and the parties were instructed to report the litigation’s status by March 25, 2025.

The lawsuit arose in response to the 2024 independent contractor rule, which revised the standard for classifying workers under the Fair Labor Standards Act (FLSA). The rule implemented a six-factor “economic realities” test and rescinded the 2021 independent contractor rule from the Trump Administration, which had been more favorable to businesses utilizing independent contractors.

Frisard’s Transp., LLC, a trucking company, challenged the rule, claiming it imposed undue restrictions. A Louisiana federal court previously denied a temporary restraining order and preliminary injunction, allowing the rule to be enforced while the case proceeded. This is one of five ongoing lawsuits challenging the rule.

The Fifth Circuit’s decision to pause the case reflects the likelihood that the DOL, under new leadership, may withdraw its defense of the 2024 rule, potentially leading to further rulemaking or rescission.

Courts in other related cases have upheld the 2024 rule or dismissed challenges on standing grounds. However, continued legal disputes and possible administrative changes suggest ongoing uncertainty regarding the rule’s future.

Lawyers counseling industries heavily reliant on independent contractors should be vigilant about shifts in the DOL’s stance and prepare for compliance adjustments in what appears to be a fluid regulatory environment surrounding independent contractor classifications.