[Federal Register Volume 79, Number 92 (Tuesday, May 13, 2014)]
[Proposed Rules]
[Pages 27265-27274]
[FR Doc No: 2014-10722]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 385, 386 and 390

[Docket No. FMCSA-2012-0377]
RIN 2126-AB57

Coercion of Commercial Motor Vehicle Drivers; Prohibition

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: FMCSA proposes to adopt regulations that prohibit motor
carriers, shippers, receivers, or transportation intermediaries from
coercing drivers to operate commercial motor vehicles (CMVs) in
violation of certain provisions of the Federal Motor Carrier Safety
Regulations (FMCSRs)--including drivers' hours-of-service limits and
the commercial driver's license (CDL) regulations and associated drug
and alcohol testing rules--or the Hazardous Materials Regulations
(HMRs). In addition, the NPRM would prohibit anyone who operates a CMV
in interstate commerce from coercing a driver to violate the commercial
regulations. This NPRM includes procedures for drivers to report
incidents of coercion to FMCSA, rules of practice the Agency would
follow in response to allegations of coercion, and describes penalties
that may be imposed on entities found to have coerced drivers. This
proposed rulemaking is authorized by section 32911 of the Moving Ahead
for Progress in the 21st Century Act (MAP-21) and the Motor Carrier
Safety Act of 1984 (MCSA), as amended.

DATES: You may submit comments by August 11, 2014.

ADDRESSES: You may submit comments identified by the docket number
FMCSA-2012-0377 using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
     Fax: 1-202-493-2251.
     Mail: Docket Services, U.S. Department of Transportation,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.
     Hand Delivery: Ground Floor, Room W12-140, DOT Building,
1200 New Jersey Avenue SE., Washington, DC 20590 between 9 a.m. and 5
p.m. e.t., Monday through Friday, except Federal holidays.

To avoid duplication, please use only one of these four methods. See
the ``Public Participation and Request for Comments'' portion of the
SUPPLEMENTARY INFORMATION section below for instructions on submitting
comments.

FOR FURTHER INFORMATION CONTACT: Mr. Charles Medalen, Regulatory
Affairs Division, Office of Chief Counsel,<PHONE_NUMBER>. FMCSA office
hours are from 9 a.m. to 5 p.m., e.t., Monday through Friday, except
Federal holidays.

SUPPLEMENTARY INFORMATION: This NPRM is organized as follows.

Table of Contents

I. Public Participation and Request for Comments
II. Executive Summary
III. Acronyms and Abbreviations
IV. Legal Basis for This Rulemaking
V. Background
VI. FMCSA Proposal
VII. Section-by-Section Description
VIII. Regulatory Analyses

I. Public Participation and Request for Comments

    FMCSA invites you to participate in this rulemaking by submitting
comments and related materials.

A. Submitting Comments

    If you submit a comment, please include the docket number for this
rulemaking (FMCSA-2012-0377), indicate the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. You may submit your comments and material
online or by fax, mail, or hand delivery, but please use only one of
these means. FMCSA recommends that you include your name and a mailing
address, an email address, or a phone number in the body of your
document so that FMCSA can contact you if there are questions regarding
your submission.
    To submit your comment online, go to http://www.regulations.gov and
in the search box insert the docket number ``FMCSA-2012-0377'' and
click the search button. When the new screen appears, click on the blue
``Comment Now!'' button and type your comment into the text box in the
following screen. Choose whether you are submitting your comment as an
individual or on behalf of a third party and then submit. If you submit
your comments by mail or hand delivery, submit them in an unbound
format, no larger than 8\1/2\ by 11 inches, suitable for copying and
electronic filing. If you submit comments by mail and would like to
know that they reached the facility, please enclose a stamped, self-
addressed postcard or envelope.
    FMCSA will consider all comments and material received during the
comment period and may change this proposed rule based on your
comments.

B. Viewing Comments and Documents

    To view comments, as well as any documents mentioned in this
preamble as being available in the docket online, go to http://www.regulations.gov and in the search box insert the docket number
``FMCSA-2012-0377'' in the Keyword box and click ``Search.'' Next,
click ``Open Docket Folder'' and you will find all documents and
comments related to the proposed rulemaking. If you do not have access
to the Internet, you may view the docket online by visiting the Docket
Services in Room W12-140 on the ground floor of the Department of
Transportation West Building, 1200 New Jersey Avenue SE., Washington,
DC 20590, between 9 a.m. and 5 p.m., e.t., Monday through Friday,
except Federal holidays.

C. Privacy Act

    Anyone is able to search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review the DOT
Privacy Act Statement for the Federal Docket Management System
published in the Federal Register on December 29, 2010 (75 FR 82132),
or you may visit http://www.gpo.gov/fdsys/pkg/FR-2010-12-29/pdf/2010-32876.pdf.

II. Executive Summary

Purpose and Summary of the Major Provisions

    Congress mandated that FMCSA ensure that any regulations adopted
pursuant to the Motor Carrier Safety Act of 1984 (MCSA), as amended the
Moving Ahead for Progress in the 21st Century Act (MAP-21), do not
result in coercion of drivers by motor carriers, shippers, receivers,
or transportation intermediaries. This MAP 21 provision authorizes
FMCSA to prohibit these entities from coercing drivers to operate CMVs
in violation of certain provisions of the FMCSRs or the HMRs. That part
of the proposed rulemaking is authorized by sec. 32911 of MAP-21. FMCSA
proposes to utilize the broad authority of MCSA [49 U.S.C. 31136(A)(1)-
(4)] and authorities transferred from the former Interstate Commerce
Commission (ICC) under the ICC Termination Act [49 U.S.C. 13301(a)] to
prohibit operators of CMVs from coercing drivers to violate certain

provisions of the Agency's commercial regulations.
    The major provisions of this NPRM include prohibitions of coercion,
procedures for drivers to report incidents of coercion to FMCSA, and
rules of practice the Agency would follow in response to allegations of
coercion.

Benefits and Costs

    The FMCSA believes that this rulemaking would not create an
economically significant impact. The motor carriers, freight
forwarders, brokers and transportation intermediaries that previously
engaged in acts of coercion against truck or bus drivers will incur
compliance cost to operate in accordance with regulations, and they
would lose whatever economic benefit that the coercion had gained them.
There would be safety benefits from that increased compliance with
regulations and driver health benefits if hours of service violations
decreased. By foregoing acts of coercion, the drivers would conduct
their safety-sensitive work in a manner consistent with the applicable
Federal regulations. During the four-year period from 2009 through
2012, there were 253 OSHA whistleblower complaints with merit and 20
Office of the Inspector General (OIG) investigations concerning acts of
coercion by motor carriers. This is an average of 68.25 acts of
coercion per year during the four-year period. The Agency estimates it
would be less than the $100 million threshold required for economic
significance under E.O. 12866.

III. Acronyms and Abbreviations

CDL Commercial Driver's License
CMV Commercial Motor Vehicle
DOT Department of Transportation
FMCSA Federal Motor Carrier Safety Administration
FMCSRs Federal Motor Carrier Safety Regulations
HOS Hours of Service
HMRs Hazardous Materials Regulations
ICC Interstate Commerce Commission
MAP-21 Moving Ahead for Progress in the 21st Century
MCSA or 1984 Act Motor Carrier Safety Act of 1984
NAICS North American Industry Classification System
OIG Office of Inspector General
OSHA Occupational Safety and Health Administration
SBA Small Business Administration
STAA Surface Transportation Assistance Act of 1982

IV. Legal Basis for This Rulemaking

    This proposed rule is based on the authority of the Motor Carrier
Safety Act of 1984 (MCSA or 1984 Act) [49 U.S.C. 31136(a)], as amended
by the Moving Ahead for Progress in the 21st Century Act (MAP-21) [Pub.
L. 112-141, section 32911, 126 Stat. 405, 818, July 6, 2012] and on 49
U.S.C. 13301(a), as amended by the ICC Termination Act of 1995 (ICCTA)
[Pub. L. 104-88 (Dec. 29, 1995) [Pub. L. 104-88, 109 Stat. 803,
December 29, 1995].
    The 1984 Act confers on the Department of Transportation (DOT)
authority to regulate drivers, motor carriers, and vehicle equipment.

    At a minimum, the regulations shall ensure that--(1) commercial
motor vehicles are maintained, equipped, loaded, and operated
safely; (2) the responsibilities imposed on operators of commercial
motor vehicles do not impair their ability to operate the vehicles
safely; (3) the physical condition of operators of commercial motor
vehicles is adequate to enable them to operate the vehicles safely .
. .; and (4) the operation of commercial motor vehicles does not
have a deleterious effect on the physical condition of the operators
[49 U.S.C. 31136(a)].

    Section 32911 of MAP-21 enacted a fifth requirement, i.e., that the
regulations ensure that ``(5) an operator of a commercial motor vehicle
is not coerced by a motor carrier, shipper, receiver, or transportation
intermediary to operate a commercial motor vehicle in violation of a
regulation promulgated under this section, or chapter 51 or chapter 313
of this title'' [49 U.S.C. 31136(a)(5)].
    The 1984 Act also includes more general authority to ``(10) perform
other acts the Secretary considers appropriate'' [49 U.S.C.
31133(a)(10)].
    The NPRM includes two separate prohibitions. One would prohibit
motor carriers, shippers, receivers, or transportation intermediaries
from coercing drivers to violate regulations based on section 31136
(which is the authority for many parts of the FMCSRs), 49 U.S.C.
chapter 313 (the authority for the commercial driver's license (CDL)
and drug and alcohol regulations), and 49 U.S.C. chapter 51 (the
authority for the hazardous material regulations). This is required by
49 U.S.C. 31136(a)(5).
    A second provision would prohibit entities that operate CMVs in
interstate commerce from coercing drivers to violate the commercial
regulations. As explained more fully below, this provision is based on
the broad general authority of 49 U.S.C. 31136(a)(1)-(4), especially
paragraphs (a)(1) and (2). Banning coercion to violate the safety-
related commercial regulations is well within the scope of section
31136(a)(1)-(4). Applying the same ban to commercial provisions that
are not immediately related to safety is nonetheless consistent with
the goals of section 31136 and will help to inhibit the growth of a
culture of indifference to regulatory compliance, a culture known to
contribute to unsafe CMV operations. Banning coercion to violate the
commercial regulations is also within broad authority transferred from
the former Interstate Commerce Commission to prescribe regulations to
carry out Part B of Subtitle IV of Title 49, U.S.C. 13301(a). This
prohibition would apply to operators of CMVs, which are mainly motor
carriers, but not to shippers, receivers, or transportation
intermediaries, since they are not subject to section 31136(a)(1)-(4)
or section 13301.
    Together, these two provisions would ensure against most kinds of
coercion drivers might encounter.
    This proposed rule would also adopt procedures for drivers to
report coercion and rules of practice the Agency would follow.
    FMCSA believes the reduction of regulatory violations caused by
coercion will prove conducive to improved driver health and well-being,
consistent with the objectives of section 31136(a)(2)-(4).
    Before prescribing any regulations, FMCSA must consider their
``costs and benefits'' [49 U.S.C. 31136(c)(2)(A) and 31502(d)]. Those
factors are discussed in this proposed rule.

V. Background

    Section 32911 of MAP-21 is the most recent example of Congress'
recognition of the important role the public plays in highway safety.
In the 1980s, Congress implemented new financial responsibility
requirements for motor carriers of property and passengers to encourage
the insurance industry to exercise greater scrutiny over the operations
of motor carriers as one method to improve safety oversight (section 30
of the Motor Carrier Act of 1980 (Pub. L. 96-296) and section 18 of the
Bus Regulatory Reform Act of 1982 (Pub. L. 97-261)).
    Section 32911 of MAP-21 represents a similar congressional decision
to expand the reach of motor carrier safety regulations from the supply
side (the drivers and carriers traditionally regulated by the Federal
government) to the demand side--the shippers, receivers, brokers,
freight forwarders, travel groups and others that hire motor carriers
to provide transportation and whose actions have an impact on CMV
safety.
    Economic pressure in the motor carrier industry affects commercial
drivers in ways that can affect safety adversely. For years, drivers
have

voiced concerns that other parties in the logistics chain are
frequently indifferent to the operational limits imposed on them by the
FMCSRs. Allegations of coercion were submitted in the docket for the
2010-2011 HOS rulemaking.\1\ Also, drivers and others who testified at
FMCSA listening sessions and before Congress said that some motor
carriers, shippers, receivers, tour guides and brokers insist that a
driver deliver a load on a schedule that would be impossible to meet
without violating HOS or other regulations. Drivers may be pressured to
operate vehicles with mechanical deficiencies, despite the restrictions
imposed by the safety regulations. Drivers who object that they must
comply with the FMCSRs are sometimes told to get the job done despite
the restrictions imposed by the safety regulations. The consequences of
their refusal to do so are either stated explicitly or implied in
unmistakable terms: Loss of a job, denial of subsequent loads, reduced
payment, denied access to the best trips, etc.
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    \1\ See 76 FR 81162.
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    Although sec. 32911 of MAP-21 amended 49 U.S.C. 31136(a), it did
not amend the jurisdictional definitions in 49 U.S.C. 31132, which
specify the reach of FMCSA's authority to regulate motor carriers,
drivers, and CMVs. Thus, it appears that Congress did not intend to
apply all of the FMCSRs to shippers, receivers, and transportation
intermediaries not now subject to those requirements. [Motor carriers,
of course, have always been subject to the FMCSRs.] Instead, sec. 32911
prohibited these entities from coercing drivers to violate most of the
FMCSRs. This necessarily confers upon FMCSA the jurisdiction over
shippers, receivers, and transportation intermediaries necessary to
enforce that prohibition.
    Although MAP-21 did not address coercion to violate the commercial
regulations the Agency inherited in the ICC Termination Act of 1995,
FMCSA proposes to adopt such a rule in order to ensure that there is no
significant gap in the applicability of the coercion prohibition. As
discussed above in the Legal Basis section, the Motor Carrier Safety
Act of 1984 gives the Agency broad authority to ensure that CMVs are
maintained, equipped, loaded, and operated safely, and that the
responsibilities imposed on drivers do not impair their ability to
operate CMVs safely [49 U.S.C. 31136(a)(1)-(2)]. Some of the commercial
regulations have effects related to safety. Designation of a process
agent under 49 CFR part 366 ensures that parties injured in a CMV crash
can easily serve legal documents on the carrier operating the CMV,
wherever the location of its corporate offices. Registration as a for-
hire motor carrier under 49 CFR part 365, or as a broker under 49 CFR
part 371, ensures that an applicant has met the minimum standards for
safe and responsible operations. Coercion of drivers to violate
requirements such as these could have an effect on their ability to
operate CMVs safely, e.g., requiring a driver to operate a vehicle in
interstate commerce when the owner had neither obtained operating
authority registration from FMCSA nor filed proof of insurance.
    The minimum requirement to obtain FMCSA authority to operate as a
for-hire motor carrier, freight forwarder, or broker under 49 U.S.C.
13902, 13903, or 13904, respectively, is willingness and ability to
comply with ``this part and the applicable regulations of the
Secretary. . . .'' Among those ``applicable regulations'' would be this
NPRM's ban on coercing drivers to violate the commercial regulations.
For-hire motor carriers are subject to an even more explicit
requirement to observe ``any safety regulations imposed by the
Secretary'' [49 U.S.C. 13902(a)(1)(B)(i)], including proposed Sec.
390.6(a)(2). Moreover, independent of MAP-21, FMCSA has statutory
authority under 49 U.S.C. 13301(a), formerly vested in the Interstate
Commerce Commission, to prescribe regulations to carry out chapter 139
and the rest of Part B of Subtitle IV of Title 49. The prohibition on
coercing drivers to violate the commercial regulations is within the
scope of this authority.
    Because both of the coercion prohibitions described above are based
on 49 U.S.C. 31136(a), codified in subchapter III of chapter 311,
violations of those rules would be subject to the civil penalties in 49
U.S.C. 521(b)(2)(A), which provides that

any person who is determined by the Secretary, after notice and
opportunity for a hearing, to have committed an act that is a
violation of the regulations issued by the Secretary under
subchapter III of chapter 311 (except sections 31138 and 31139 \2\)
or section 31502 of this title shall be liable to the United States
for a civil penalty in an amount not to exceed $10,000 for each
offense.
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    \2\ Sections 31138 and 31139 prescribe minimum financial
responsibility standards for the transportation of passengers and
property, respectively.

    The proposed prohibitions on coercion would be issued under
subchapter III of chapter 311--namely 49 U.S.C. 31136(a)--and the
statutory penalty in sec. 521(b)(2)(A) would therefore be applicable.
However, pursuant to the Debt Collection Improvement Act of 1996 [Pub.
L. 104-134, title III, chapter 10, sec. 31001(s), 110 Stat. 1321-373],
the inflation-adjusted civil penalty per offense would be $11,000 49
CFR part 386, App. B, Paragraph (a)(3).

VI. FMCSA Proposal

    The Agency's proposal would add Sec.  390.6(a)(1) to 49 CFR part
390. It would prohibit motor carriers, shippers, receivers, and
transportation intermediaries from threatening drivers with loss of
work or other economic opportunities for refusing to operate a CMV
under circumstances that those entities knew, or should have known,
would require the driver to violate 49 CFR parts 171-173, 177-180, 380-
383, or 390-399, or Sec. Sec.  385.105(b), 385.111(a), (c)(1), or (g),
or 385.415, or 385.421. Section 390.6(a)(2) would prohibit motor
carriers from using those threats to compel drivers to operate such
vehicles in violation of 49 CFR parts 356, 360, or 365-379.
    The standard ``knew, or should have known'' is essentially a
restatement of the common law principle of ``respondeat superior,''
which holds the ``master'' (employer) liable for the acts of his
``servant'' (employee). In most cases, FMCSA holds motor carriers
responsible for the actions of their drivers (see, Sec.  390.11).
Because a carrier is responsible for its drivers' compliance with the
hours of service (HOS) regulations, it has an affirmative duty before
assigning a trip to ensure that the driver has sufficient time left
under the HOS rules to complete that run. When a shipper, receiver, or
transportation intermediary directs a driver to complete a run within a
certain time, it has assumed the role normally reserved to the driver's
employer. As such, it may commit coercion if it fails to heed a
driver's objection that the request would require him/her to break the
rules. The shipper, receiver, or transportation intermediary will not
be excused from liability for coercion because it did not inquire about
the driver's time remaining or pretended not to hear the objection.
When directing the driver's actions, these entities ``should have
known'' whether the driver could complete the run without violating the
FMCSRs.
    An act of coercion by a carrier, shipper, receiver, or
transportation intermediary does not absolve the driver of his
responsibility to comply with safety regulations, including the HOS
rules. Furthermore, FMCSA's definition of coercion prohibits threats by
carriers, shippers, receivers, or transportation intermediaries to
withhold future business from a driver for objecting to

operate a vehicle in violation of the safety regulations. A threat
would not constitute coercion unless the driver objects or attempts to
object to the operation of the vehicle for reasons related to the HOS
(or other) regulations. FMCSA invites comments on whether--and, if so,
how--drivers may modify their interactions with shippers, receivers,
and transportation intermediaries in response to this rule.
    In cases of coercion, FMCSA could impose a civil penalty not to
exceed $11,000 per offense. In addition, FMCSA is authorized to
suspend, amend, or revoke the operating authority registration of a
for-hire motor carrier, broker, or freight forwarder for ``willful
failure to comply with . . . an applicable regulation or order of the
Secretary . . .'' [49 U.S.C. 13905(d)]. One of the ``applicable
regulation[s]'' that could trigger the suspension or revocation of
operating authority is proposed 49 CFR 390.6. The proposed rule against
coercion, of course, would apply as well to private motor carriers that
do not need operating authority registration; the only available
penalties in that case would be financial.
    The Agency has announced plans to conduct a survey of drivers and
carriers that addresses the issue of harassment and coercion through
the use of electronic logging devices (ELDs) and related technologies
(77 FR 74267, May 28, 2013). The Agency will consider the results of
the survey as part of its efforts to ensure that the ELD rulemaking
does not increase the likelihood of harassment or coercion of drivers,
as required by sec. 32301(b) of MAP-21. Today's rulemaking proposal
deals with coercion in a context broader than electronic logging
devices. It is important that comments specific to the supplemental
NPRM on electronic logging devices, which was published March 28, 2014
(79 FR 17656), are directed to that rulemaking (docket  FMCSA-
2010-0167).
    The Agency specifically welcomes your comments on what types of
coercion are likely to occur. FMCSA believes most allegations of
coercion will involve the HOS regulations or vehicle maintenance, but
welcomes comments on any kind of coercion that this rule may address.
    Motor carriers that operate CMVs must be aware that they may not
coerce drivers to violate the commercial regulations specified in Sec.
390.6(a)(2).
    There may be some overlap between the anti-coercion provisions of
this proposed rule and the employee protection provision of the Surface
Transportation Assistance Act (STAA), administered by the Labor
Department (see, 49 U.S.C. 31105, 29 CFR 1978.100, et seq.). STAA and
the regulations prohibit, among other things, the discharge or
discipline of, or discrimination against, a driver concerning pay or
terms or privileges of employment when a driver refuses to operate a
vehicle because it violates a U.S. CMV safety or health standard or
because the driver has a reasonable apprehension of serious injury to
him- or herself or the public as a result of the vehicle's unsafe
condition [49 U.S.C. 31105(a)(1)]. If the Labor Department determines
that a driver was fired or suffered any adverse action for thus
refusing to compromise safety, it can order the employer to reinstate
the driver, pay back pay and compensatory damages, pay punitive damages
up to $250,000 where warranted, and take other remedial actions.
    The Labor Department's mandate under 49 U.S.C. 31105 is to protect
drivers from discharge or other discrimination based on a driver's
refusal to violate safety regulations, among other things, and it has
broad authority to pursue that goal. FMCSA's mandate is safety. Under
sec. 32911 and the broad provisions of the 1984 Act, as amended by MAP-
21, FMCSA has a mandate to protect drivers by deterring coercion to
violate the FMCSRs but the Agency has no authority to compensate
drivers who experience coercion. The remedies available to FMCSA are
civil penalties in all cases and the suspension or revocation of
operating authority in some cases. A driver who files a complaint about
discharge or other discrimination with OSHA may be able to file a
complaint about coercion with FMCSA.
    Drivers alleging illegal discrimination or discipline under 29 CFR
1978.100, et seq., or coercion under 49 CFR 390.6, bear a substantial
burden of proof. Neither OSHA nor FMCSA can proceed without evidence
and the driver will have to provide much of that evidence. The proposed
new complaint procedures in 49 CFR 386.12(e) and 390.6(b) allow drivers
to present whatever evidence they have to substantiate an allegation of
coercion.
    Parties that violate the prohibition of coercion would be subject
to a maximum civil penalty of $11,000 per violation. Furthermore, a
violation of section 390.6 by a motor carrier would be an acute
violation under Appendix B, section VII of part 385, and thus could
potentially affect the carrier's safety fitness rating.
    In determining the amount of any civil penalty, Congress instructed
FMCSA to consider a number of factors, including the nature,
circumstances, extent, and gravity of the violation committed, as well
as the degree of culpability, history of prior offenses, effect on the
ability to continue to do business, and other such matters as justice
and public safety may require. Congress instructed FMCSA to calculate
each penalty to induce further compliance [49 U.S.C. 521(b)(2)(D)].
Congress, however, entrusted FMCSA with the responsibility to ensure
motor carriers operate safely by imposing penalties designed to ensure
prompt and sustained compliance with safety laws (section 222 of the
Motor Carrier Safety Improvement Act of 1999 (MCSIA) [Pub. L. 106-159,
113 Stat. 1769, Dec. 9, 1999, 49 U.S.C. 521 note].

VII. Section-by-Section Description

A. Part 385

    The rule would make Sec.  390.6(a)(1) and (2) ``acute'' regulations
in section VII of Appendix B to 49 CFR part 385.

B. Part 386

    Section 386.1, ``Scope of the rules in this part,'' would be
amended by adding a new paragraph (c) referring to the filing and
handling of coercion complaints under new Sec.  386.12(e).
    The title of Sec.  386.12 would be changed to ``Complaint of
substantial violation,'' which is the subject of that section. A new
Sec.  386.12(e), ``Complaint of coercion,'' would be added. The
procedures to file and handle coercion complaints would be essentially
the same as those for substantial violations, except that the complaint
would be filed with the FMCSA Division Administrator of the State where
the driver was when the alleged coercion occurred.

C. Part 390

    Section 390.3(a) would be amended to include a reference to the
coercion provisions in Sec.  386.12(e) and Sec.  390.6, and describe
the applicability of those provisions.
    Section 390.5 would be amended to add definitions of ``Coerce or
coercion,'' ``Receiver or consignee,'' ``Shipper,'' and
``Transportation intermediary.'' The definitions of ``Receiver or
consignee,'' ``Shipper,'' and ``Transportation intermediary'' would
make these entities subject to the prohibition on coercion in Sec.
390.6 only when shipping, receiving or arranging transportation of
property (and in the case of ``transportation intermediaries,''
passengers) in interstate commerce. Although the term ``transportation
intermediary'' is commonly associated with brokers and freight
forwarders, it also includes travel agents and similar entities that
arrange group tours or trips

and contract with motorcoach operators for transportation services.
Such intermediaries and their agents are subject to the prohibition on
coercion. Because the hazardous materials regulations apply to
transportation in intrastate commerce, the definitions make clear that
the prohibition on coercion applies to parties that ship, receive, or
arrange transportation of hazardous materials in interstate or
intrastate commerce.
    Section 390.6(a)(1) would be added to prohibit motor carriers,
shippers, receivers, or transportation intermediaries, or the agents,
officers, or representatives of such entities, from coercing drivers to
operate CMVs in violation of 49 CFR parts 171-173, 177-180, 380-383, or
390-399, or Sec. Sec.  385.105(b), 385.111(a), (c)(1), or (g), 385.415,
or 385.421. These parts correspond to the statutory language in 49
U.S.C. 31136(a)(5). Parts 171-173 and 177-180 are the hazardous
materials regulations applicable to highway transportation that were
promulgated under 49 U.S.C. chapter 51. Parts 382-383 are the
commercial driver's license (CDL) and drug and alcohol testing
regulations promulgated under 49 U.S.C. chapter 313. Parts 390-399 are
those portions of the FMCSRs adopted under the authority (partial or
complete) of 49 U.S.C. 31136(a). The other parts or sections listed are
based on one or more of the statutes referenced in 49 U.S.C.
31136(a)(5).
    Section 390.6(a)(2) would be added to prohibit operators of CMVs or
their agents, officers, or representatives, from coercing drivers to
violate 49 CFR parts 356, 360, or 365-379. This subsection is based on
the authority of 49 U.S.C. 31136(a)(1)-(4) and 49 U.S.C. 13301(a).
    Section 390.6(b) would describe the procedures for a driver to file
a complaint of coercion with FMCSA.

VIII. Regulatory Analyses

E.O. 12866 (Regulatory Planning and Review and DOT Regulatory Policies
and Procedures as Supplemented by E.O. 13563)

    FMCSA has determined preliminarily that this proposed rule is a
significant regulatory action under E.O. 12866 (58 FR 51735, October 4,
1993), as supplemented by E.O. 13563 (76 FR 3821, January 21, 2011),
and significant within the meaning of the DOT regulatory policies and
procedures (44 FR 11034, February 26, 1979). The estimated economic
costs of the proposed rule would not exceed the $100 million annual
threshold (as explained below). The Agency expects the proposed rule to
have substantial congressional and public interest because it would
potentially impose civil penalties on entities not previously subject
to the Agency's jurisdiction (shippers, receivers, and transportation
intermediaries).
    This NPRM would prohibit motor carriers, shippers, receivers and
transportation intermediaries from threatening drivers who refuse to
operate a CMV under certain circumstances with loss of employment,
future business, or other economic harm. Additionally, it would
prohibit operators of CMVs from making the same threats to induce
drivers to violate 49 CFR parts 356, 360, or 365-379. FMCSA is
proposing to add to Appendix B in 49 CFR part 385 new paragraphs that
would define Sec.  390.6(a)(1) and (2) as acute regulations with
respect to motor carriers.
Extent of Economic Impact
    The 1982 Surface Transportation Assistance Act (STAA) includes
whistleblower protections for motor carrier employees (49 U.S.C.
31105). OSHA, which administers the complaint process created by
Section 31105, received 1,158 complaints between FY 2009 and FY
2012.\3\ OSHA found that 253 of them (22 percent) had merit.\4\ Between
FY 2009 and FY 2012, the OIG hotline received 91 complaints alleging
that motor carriers had coerced or retaliated against drivers. FMCSA
determined that 20 of these complaints had merit.\5\ The average number
of verified complaints for that 4-year period was therefore 68.25 per
year [253 + 20/4 = 68.25].
---------------------------------------------------------------------------

    \3\ U.S. Department of Labor, Occupational Safety & Health
Administration (OSHA), Whistleblower Protection Program:
Investigative Data Fact Sheets. Available at http://www.whistleblowers.gov/wb_data_FY05-12.pdf.
    \4\ Ibid., Footnote 3.
    \5\ U.S. Department of Transportation, Office of the Inspector
General (OIG). This averaged 23 complaints per year, (with 44 in
2010), which the OIG referred to FMCSA. FMCSA substantiated 20
complaints (22 percent) of violations of acute and critical
regulations due to driver allegations of unlawful discrimination or
discipline (See 29 CFR 1978.100 et seq.). Available at http://www.oig.dot.gov/Hotline.
---------------------------------------------------------------------------

    Some unknown portion of the 253 complaints filed with OSHA during
that period almost certainly dealt with coercion or similar actions.
Even if all of them were coercion-related, this number--combined with
the 20 substantiated complaints filed with the OIG--remains small
compared to the total population of CMV drivers. Section 31105,
however, applies only to employers (basically motor carriers) while
this rule would also cover shippers, receivers, and transportation
intermediaries. The Agency is unable to estimate the number of coercion
allegations it may receive, whether triggered by actions of motor
carriers or other entities made subject to this rule by MAP-21.
    In view of the small number of coercion-related complaints filed
with OSHA and DOT's OIG, the aggregate economic value to motor carriers
of these coercion-related incidents is likely to be low. Therefore, the
cost to carriers of eliminating those incidents--assuming the proposed
rule has that effect--and incurring the higher costs of compliance,
would also be low. We believe that the application of this rule to
shippers, receivers, brokers, freight forwarders, and other
transportation intermediaries will not significantly increase the
number of coercion complaints, since drivers generally have more
frequent and direct contacts with their employers than with these other
parties. In addition, even though the rule applies to a larger
population, FMCSA also notes that the rule should have a chilling
effect on entities considering coercion.
    The roughly 68 annual complaints estimated above is the only
available estimate of coercion in the trucking industry now. This rule
would be expected to reduce the amount of coercion that takes place,
but there is no available measure of the effectiveness of the rule. The
relatively low number of complaints suggests that the overall economic
impact will be small, and less than the $100 million threshold of
economic significance under E.O. 12866.
Benefits
    If coercion creates situations where CMVs are operated in an unsafe
manner, then there are consequences of safety and driver health risks.
By forcing drivers to operate mechanically unsafe CMVs or drive beyond
their allowed hours, coercion increases the risk of crashes. Reduction
of these behaviors because of this rule would generate a safety
benefit. Additionally, the operation of CMVs beyond HOS limits has been
shown to have negative consequences for driver health. A reduction of
this practice would create an improvement in driver health.
Costs
    This rule, as an enforcement measure, would impose compliance costs
on carriers and other business entities in the trucking industry. If
drivers now operate CMVs in violation of hours of service rules, or if
coercion had caused drivers with mechanical defects, carriers would
potentially have to reorganize

their schedules or hire new drivers to operate in compliance.
Maintenance and other costs might also increase as a result of this
rule. Additionally, the entities that practice coercion would lose the
economic benefit of that coercion. This economic benefit could be time-
related (if drivers are coerced into driving when they should stop and
rest, stop and wait for CMV maintenance, or drive a vehicle they are
not qualified to operate rather than wait for a qualified driver).
    Drivers alleging coercion will have to provide a written statement
describing the incident along with evidence to support their charges.
This total paperwork burden is difficult to estimate but is not likely
to be very large. Similarly the Agency believes that the investigation
of those claims deemed to have merit will not have a large cost.
    If, as a result of this rule, shippers, receivers, and
transportation intermediaries begin to inquire about drivers' available
hours under the HOS rules when they had not previously done so, there
may be additional costs to those parties that FMCSA has not calculated
and cannot estimate. The Agency invites comments and solicits
information on this question.
Summary
    The Agency does not believe that the benefits and costs of this
rule would create a large economic impact. The safety benefits and
compliance costs are likely to be very small due to the small number of
expected cases each year. Therefore, the Agency believes that the
proposed rule will not be economically significant. FMCSA welcomes the
submission of any relevant comments, data, or other materials. This
proposed rule has been reviewed by the Office of Management and Budget
(OMB).

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.)
requires Federal agencies to consider the effects of their regulatory
actions on small business and other small entities and to minimize any
significant economic impact. The term ``small entities'' comprises
small businesses and not-for-profit organizations that are
independently owned and operated and are not dominant in their fields,
as well as governmental jurisdictions with populations of less than
50,000.\6\ Accordingly, DOT policy requires an analysis of the impact
of all regulations on small entities and mandates that agencies strive
to lessen any adverse effects on these businesses.
---------------------------------------------------------------------------

    \6\ Regulatory Flexibility Act (5 U.S.C. 601 et seq.) see
National Archives at http://www.archives.gov/federal-register/laws/regulatory-flexibility/601.html.
---------------------------------------------------------------------------

    Under the Regulatory Flexibility Act, as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121,
110 Stat. 857), the proposed rule is not expected to have a significant
economic impact on a substantial number of small entities. As indicated
above, OSHA found merit in only 253 complaints filed over a 4-year
period, or about 63 per year. Even if all of the complaints were
classified as coercion-related, that number would be very small when
compared to the size of the driver population and motor carrier
industry.
    The Small Business Administration (SBA) classifies businesses
according to the average annual receipts. The SBA defines a ``small
entity'' in the motor carrier industry [i.e., general freight truck
transportation, subsector 484 of the North American Industry
Classification System (NAICS)] as having revenues of less than $25.5
million \7\ per firm. Likewise, transportation intermediaries (i.e.,
subsector 488 of NAICS) which include brokers and freight forwarders,
are classified as small if their annual revenue is under $14
million.\8\
---------------------------------------------------------------------------

    \7\ U.S. Small Business Administration Table of Small Business
Size Standards matched to North American Industry Classification
System Codes (NAICS), effective January, 2012. See NAIC subsector
484 (Truck Transportation) and 488 Support Activities for
Transportation).
    \8\ The Small Business Administration increased the annual
revenue small business threshold for passenger carriers from $7
million to $14 million in a final rule titled, ``Small Business
Standards: Transportation and Warehousing (77 FR 10943, February 24,
2012).
---------------------------------------------------------------------------

    Table 1 presents a breakdown of FMCSA's revenue estimates for the
populations in various categories. By SBA standards, the vast majority
of all businesses in the motor carrier and related industries are
``small entities.'' Although general freight transportation arrangement
firms fall under the $14 million threshold, there is an exception for
``non-vessel household goods forwarders.'' This exception stipulates
that the revenue threshold, for this sub-set of freight forwarders in
the trucking industry is $25.5 million. As indicated in the above,
fewer than 70 coercion complaints per year have been filed with OSHA
and FMCSA in the past few years. We have no reason to believe that
number will increase significantly under the rule. In fact, the
potential penalty for coercing a driver should have a deterrent effect.
Even if the penalty assessed might have a ``significant economic
impact'', the limited number of recent coercion complaints suggests
that the penalty would not affect ``a substantial number of small
entities'' given that there are nearly 500,000 firms in the industry
that qualify as small entities.
    This rule does not affect industry productivity by requiring new
documentation, affecting labor productivity or availability, or
increased expenditures on maintenance or new equipment. The fines that
are the only impact can be avoided by not coercing drivers into
violating existing regulations. Furthermore, by regulation, the
Agency's fines are usually subject to a maximum financial penalty limit
of 2 percent of a firm's gross revenue. For the vast majority of small
firms, a fine at this level would not be ``significant'' in the sense
that it would jeopardize the viability of the firm.
    The table below excludes shippers and receivers subject to the
prohibition on coercion, a group which is a large portion of the entire
U.S. population, because anyone who sends or receives a package would
be considered a shipper or receiver. However, compliance with its
prohibition on coercion of drivers is not expected to have significant
economic impact on many of them. Consequently, because they are not
expected to be in a position to coerce a driver, I certify that the
proposed action would not have a significant economic impact on a
substantial number of small entities.
---------------------------------------------------------------------------

    \9\ Includes interstate motor carriers and intrastate hazardous
materials motor carriers.
    \10\ The results show that 99 percent of all carriers with
recent activity have 148 PUs or fewer.
    The SBA increased the annual revenue small business threshold
for passenger carriers from $7 million to $14 million in a final
rule titled, ``Small Business Standards: Transportation and
Warehousing. (77 FR 10943, February 24, 2012). This based on a
supposition that a passenger carrying CMV generates annual revenues
of $150,000. The analysis concluded that passenger carriers with 93
PUs or fewer ($14 million/$150,000/PU) = 93.3 PUs.
    \12\ U.S. Department of Commerce, U.S. Census Bureau: 2007
Economic Census--Transportation and Warehousing Available at https://www.census.gov/econ/industry/hierarchy/i488510.htm for NAICS code
4885.

                            Table 1--Total Number of Entities and Determination, 2012
----------------------------------------------------------------------------------------------------------------
               Type of entity                    Number                         Determination
----------------------------------------------------------------------------------------------------------------
Motor carriers (property)..................     \9\ 519,558  99% below $25.5 million.\10\
Motor carriers (passenger).................          27,666  99% below $14 million.\11\
Freight forwarders.........................     \12\ 21,809  97% below $25.5 million.
Property brokers...........................          21,565  99% below $25.5 million.
----------------------------------------------------------------------------------------------------------------
Source: Motor carrier property, passenger, and property broker numbers provided by FMCSA's, CMV facts sheet
  March 2013. Available at http://www.fmcsa.dot.gov/documents/facts-research/CMV-Facts.pdf. Freight Forwarder
  source in footnote below.

Assistance for Small Entities

    In accordance with section 213(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996, FMCSA wants to assist small entities
in understanding this proposed rule so that they can better evaluate
its effects on themselves and participate in the rulemaking initiative.
If the proposed rule would affect your small business, organization, or
governmental jurisdiction and you have questions concerning its
provisions or options for compliance, please consult the FMCSA point of
contact, Mr. Charles Medalen, listed in the FOR FURTHER INFORMATION
CONTACT section of this proposed rule.
    Small businesses may send comments on the actions of Federal
employees who enforce or otherwise determine compliance with Federal
regulations to the SBA's Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-
734-3247). DOT has a policy ensuring the rights of small entities to
regulatory enforcement fairness and an explicit policy against
retaliation for exercising these rights.

Unfunded Mandates Reform Act of 1995

    This proposed rule would not impose an unfunded Federal mandate, as
defined by the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532, et
seq.), that will result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $143.1
million (which is the value of $100 million in 2010 after adjusting for
inflation) or more in any 1 year.

E.O. 13132 (Federalism)

    A rulemaking has implications for Federalism under section 1(a) of
E.O. 13132 if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on State or local governments. FMCSA analyzed
this action in accordance with E.O. 13132. This proposed rule does not
preempt or modify any provision of State law, impose substantial direct
unreimbursed compliance costs on any State, or diminish the power of
any State to enforce its own laws. FMCSA has determined that this
proposal would not have substantial direct costs on or for States nor
would it limit the policymaking discretion of States. Accordingly, this
rulemaking does not have Federalism implications.

E.O. 12988 (Civil Justice Reform)

    This proposed rule meets applicable standards in sections 3(a) and
3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

E.O. 13045 (Protection of Children)

    E.O. 13045, Protection of Children from Environmental Health Risks
and Safety Risks (62 FR 19885, Apr. 23, 1997), requires agencies
issuing ``economically significant'' rules, if the regulation also
concerns an environmental health or safety risk that an agency has
reason to believe may disproportionately affect children, to include an
evaluation of the regulation's environmental health and safety effects
on children. The Agency determined this proposed rule is not
economically significant. Therefore, no analysis of the impacts on
children is required. In any event, the Agency does not anticipate that
this regulatory action could in any respect present an environmental or
safety risk that could disproportionately affect children.

E.O. 12630 (Taking of Private Property)

    FMCSA reviewed this proposed rule in accordance with E.O. 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights, and has determined it will not effect a taking of
private property or otherwise have takings implications.

Privacy Impact Assessment

    Section 522 of title I of division H of the Consolidated
Appropriations Act, 2005, enacted December 8, 2004 (Pub. L. 108-447,
118 Stat. 2809, 3268, 5 U.S.C. 552a note), requires the Agency to
conduct a Privacy Impact Assessment (PIA) of a regulation that will
affect the privacy of individuals. In accordance with this Act, a
privacy impact analysis is warranted to address the collection of
personally identifiable information contemplated in the proposed
Coercion rulemaking. The Agency submitted a Privacy Threshold
Assessment analyzing the proposed collection of personal information to
the Department of Transportation, Office of the Secretary's Privacy
Office.
    For the purposes of both transparency and efficiency, the privacy
analysis will take the form of the DOT standard Privacy Impact
Assessment (PIA) and will be published on the DOT Web site at
www.dot.gov/privacy concurrently with the publication of the NPRM. The
PIA will address the rulemaking, associated business processes
contemplated in the proposed rule and any information known about the
systems or existing systems to be implemented in support of the final
rulemaking. The PIA will be reviewed, and revised as appropriate, to
reflect the Final Rule and will be published not later than the date on
which the Department initiates any of the activities contemplated in
the Final Rule determined to have an impact on individuals' privacy and
not later than the date on which the system (if any) supporting
implementation of the Final Rule is updated.
    Per the Privacy Act, FMCSA will publish a system of records notice
(SORN) in the Federal Register not less than 30 days before the Agency
is authorized to collect or use PII retrieved by unique identifier.

E.O. 12372 (Intergovernmental Review)

    The regulations implementing E.O. 12372 regarding intergovernmental
consultation on Federal programs and activities do not apply to this
program.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.), Federal agencies must obtain approval from the OMB for each
collection of information they conduct, sponsor, or require through
regulations. There is no

information collection requirement with this proposed rule.

National Environmental Policy Act and Clean Air Act

    FMCSA analyzed this proposed rule in accordance with the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.). FMCSA
conducted an environmental assessment and determined that the rule has
the potential for minor environmental impacts. Based on the limited
data FMCSA has concerning the extent of the CMV driver population,
these impacts would be very small and FMCSA does not expect any
significant impacts to the environment from the proposals in this rule.
The environmental assessment has been placed in the rulemaking docket.
FMCSA requests comments on this assessment.
    In addition to the NEPA requirements to examine impacts on air
quality, the Clean Air Act (CAA) as amended (42 U.S.C. 7401 et seq.)
also requires FMCSA to analyze the potential impact of its actions on
air quality and to ensure that FMCSA actions conform to State and local
air quality implementation plans. The additional contributions to air
emissions from any of the alternatives are expected to fall below the
CAA de minimis thresholds as per 40 CFR 93.153 and are, therefore, not
expected to be subject to the Environmental Protection Agency's General
Conformity Rule (40 CFR parts 51 and 93).

E.O. 12898 (Environmental Justice)

    FMCSA evaluated the environmental effects of this proposed rule in
accordance with Executive Order 12898 and determined that there are no
environmental justice issues associated with its provisions nor any
collective environmental impact resulting from its promulgation.
Environmental justice issues would be raised if there were
``disproportionate'' and ``high and adverse impact'' on minority or
low-income populations. None of the alternatives analyzed in the
Agency's EA, discussed under National Environmental Policy Act, would
result in high and adverse environmental impacts.

E.O. 13211 (Energy Supply, Distribution, or Use)

    FMCSA has analyzed this proposed rule under E.O. 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. The Agency has determined that it is not a
``significant energy action'' under that order because it is not a
``significant regulatory action'' likely to have a significant adverse
effect on the supply, distribution, or use of energy. Therefore, it
does not require a Statement of Energy Effects under E.O. 13211.

E.O. 13175 (Indian Tribal Governments)

    This proposed rule does not have tribal implications under E.O.
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

National Technology Transfer and Advancement Act (Technical Standards)

    The National Technology Transfer and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use voluntary consensus standards
in their regulatory activities unless the agency provides Congress,
through OMB, with an explanation of why using these standards would be
inconsistent with applicable law or otherwise impractical. Voluntary
consensus standards (e.g., specifications of materials, performance,
design, or operation; test methods; sampling procedures; and related
management systems practices) are standards that are developed or
adopted by voluntary consensus standards bodies. This proposed rule
does not use technical standards. Therefore, we did not consider the
use of voluntary consensus standards.

List of Subjects

49 CFR Part 385

    Administrative practices and procedure, Highway safety, Motor
carriers, Motor vehicle safety, Reporting and recordkeeping
requirements.

49 CFR Part 386

    Administrative practice and procedures, Brokers, Freight
forwarders, Hazardous materials transportation, Highway safety, Motor
carriers, Motor vehicle safety, Penalties.

49 CFR Part 390

    Highway safety, Intermodal transportation, Motor carriers, Motor
vehicle safety, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, FMCSA proposes to amend
parts 385, 386 and 390 in 49 CFR chapter III, subchapter B, as follows:

PART 385--SAFETY FITNESS PROCEDURES

0
1. The authority citation for part 385 is amended to read as follows:

    Authority:  49 U.S.C. 113, 504, 521(b), 5105(e), 5109, 13901-
13905, 31133, 31135, 31136, 31137(a), 31144, 31148, and 31502; Sec.
113(a), Pub. L. 103-311; Sec. 408, Pub. L. 104-88; Sec. 350, Pub. L.
107-87; and 49 CFR 1.81, 1.81a and 1.87.

0
2. Amend the list of acute and critical regulations in section VII of
Appendix B to part 385 by adding two entries for Sec.  390.6 in
numerical order to read as follows:

Appendix B to Part 385--Explanation of Safety Rating Process

* * * * *

VII. List of Acute and Critical Regulations

* * * * *
Sec.  390.6(a)(1) Coercion of a driver by a motor carrier, shipper,
receiver, or transportation intermediary to operate a commercial
motor vehicle in violation of 49 CFR parts 171-173, 177-180, 380-383
or 390-399, or Sec. Sec.  385.105(b), 385.111(a), (c)(1), or (g),
385.415, or 385.421 (acute).
Sec.  390.6(a)(2) Coercion of a driver by the operator of a
commercial motor vehicle to operate that vehicle in violation of 49
CFR parts 356, 360, or 365-379 (acute).
* * * * *

PART 386--RULES OF PRACTICE FOR FMCSA PROCEEDINGS

0
3. The authority citation for part 386 continues to read as follows:

    Authority: 49 U.S.C. 113, chapters 5, 51, 131-141, 145-149, 311,
313, and 315; Sec. 204, Pub. L. 104-88, 109 Stat. 803, 941 (49
U.S.C. 701 note); Sec. 217, Pub. L. 105-159, 113 Stat. 1748, 1767;
Sec. 206, Pub. L. 106-159, 113 Stat.1763; subtitle B, title IV of
Pub. L. 109-59; and 49 CFR 1.81 and 1.87.

0
4. Revise the heading of part 386 as set forth above.
0
5. Amend Sec.  386.1 by revising paragraph (a) and adding paragraph (c)
to read as follows:

Sec.  386.1  Scope of the rules in this part.

    (a) Except as indicated in paragraph (c) of this section, the rules
in this part govern proceedings before the Assistant Administrator, who
also acts as the Chief Safety Officer of the Federal Motor Carrier
Safety Administration (FMCSA), under applicable provisions of the
Federal Motor Carrier Safety Regulations (FMCSRs) (49 CFR parts 350-
399), including the commercial regulations (49 CFR parts 360-379), and
the Hazardous Materials Regulations (49 CFR parts 171-180).
* * * * *
    (c) The rules in Sec.  386.12(e) govern the filing by a driver and
the handling by

the appropriate Division Administrator of complaints of coercion in
violation of Sec.  390.6 of this subchapter.
0
6. Amend Sec.  386.12 as follows:
0
a. Revise the section heading;
0
b. Add and reserve paragraph (d); and
0
c. Add a new paragraph (e).

Sec.  386.12  Complaint of substantial violation.

* * * * *
    (d) [Reserved]
    (e) Complaint of coercion. (1) A driver alleging a violation of
Sec.  390.6(a)(1) or (2) of this subchapter must file a written
complaint of coercion within 60 days after the event with the FMCSA
Division Administrator for the State where the incident occurred or
where the party alleged to have coerced the driver has its principal
place of business. Allegations brought to the attention of other
officials in the Agency through letter, email, social media, phone
call, or other means will be referred to the Division Administrator for
the principal place of business of the entity alleged to have coerced
the driver. Delays involved in transferring the allegation to the
appropriate Division Administrator do not stay the 60-day period for
filing a written complaint. Each complaint must be signed by the driver
and must contain:
    (i) The driver's name, address, and telephone number;
    (ii) The name and address of the person allegedly coercing the
driver;
    (iii) The specific provisions of the regulations that the driver
alleges he or she was coerced to violate; and
    (iv) A concise but complete statement of the facts relied upon to
substantiate each allegation of coercion, including the date of each
alleged violation.
    (2) Action on complaint of coercion. Upon the filing of a complaint
of coercion under paragraph (e)(1) of this section, the appropriate
Division Administrator shall determine whether the complaint is non-
frivolous and meets the requirements of paragraph (e)(1) of this
section. If the Division Administrator determines that the complaint is
non-frivolous and meets the requirements of paragraph (e)(1) of this
section, he/she shall investigate the complaint. The complaining driver
shall be timely notified of findings resulting from such investigation.
The Division Administrator shall not be required to conduct separate
investigations of duplicative complaints. If the Division Administrator
determines the complaint is frivolous or does not meet the requirements
of paragraph (e)(1) of this section, he/she shall dismiss the complaint
and notify the driver in writing of the reasons for such dismissal. If
after investigation the Division Administrator determines that a
violation has occurred, the Division Administrator may issue a Notice
of Violation under Sec.  386.11(b) or a Notice of Claim under Sec.
386.11(c).
    (c) Because prosecution of coercion in violation of Sec.  390.6 of
this subchapter will require disclosure of the driver's identity, the
Agency shall take every practical means within its authority to ensure
that the driver is not subject to harassment, intimidation,
disciplinary action, discrimination, or financial loss as a result of
such disclosure.

PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL

0
7. Revise the authority citation for part 390 to read as follows:

    Authority: 49 U.S.C. 504, 508, 31132, 31133, 31136, 31144,
31151, 31502; sec. 114, Pub. L. 103-311, 108 Stat. 1673, 1677-1678;
sec. 212, 217, 229, Pub. L. 106-159, 113 Stat. 1748, 1766, 1767;
sec. 229, Pub. L. 106-159 (as transferred by sec. 4114 and amended
by secs. 4130-4132, Pub. L. 109-59, 119 Stat. 1144, 1726, 1743-
1744), sec. 4136, Pub. L. 109-59, 119 Stat. 114, 1745; and 49 CFR
1.81, 1.81a and 1.87.

0
8. Revise Sec.  390.3(a) to read as follows:

Sec.  390.3  General applicability.

    (a)(1) The rules in subchapter B of this chapter are applicable to
all employers, employees, and commercial motor vehicles, which
transport property or passengers in interstate commerce.
    (2) The rules in 49 CFR 386.12(e) and 390.6 prohibiting the
coercion of drivers of commercial motor vehicles operating in
interstate commerce:
    (i) To violate certain safety regulations are applicable to all
motor carriers, shippers, receivers, and transportation intermediaries;
and
    (ii) To violate certain commercial regulations are applicable to
all operators of commercial motor vehicles.
* * * * *
0
9. Amend Sec.  390.5 by adding definitions of ``Coerce or Coercion,''
``Receiver or cosignee,'' ``Shipper,'' and ``Transportation
intermediary,'' in alphabetical order, to read as follows:

Sec.  390.5  Definitions.

* * * * *
    Coerce or Coercion means either--
    (1) A threat by a motor carrier, shipper, receiver, or
transportation intermediary, or their respective agents, officers or
representatives, to withhold, or the actual withholding of, current or
future business, employment, or work opportunities from a driver for
objecting to the operation of a commercial motor vehicle under
circumstances which the motor carrier, shipper, receiver, or
transportation intermediary, or their respective agents, officers, or
representatives, knew, or should have known, would require the driver
to violate 49 CFR parts 171-173, 177-180, 380-383, or 390-399, or
Sec. Sec.  385.105(b), 385.111(a), (c)(1), or (g), 385.415, or 385.421;
or
    (2) A threat by a motor carrier, or its agents, officers or
representatives, to withhold, or the actual withholding of, current or
future business, employment, or work opportunities from a driver for
objecting to the operation of a commercial motor vehicle, or to taking
other action or to the failure to act, under circumstances which the
motor carrier, or its agents, officers or representatives knew, or
should have known would require the driver to violate 49 CFR parts 356,
360, or 365-379.
* * * * *
    Receiver or consignee means a person who takes delivery from a
motor carrier or driver of a commercial motor vehicle of property
transported in interstate commerce or hazardous materials transported
in interstate or intrastate commerce.
* * * * *
    Shipper means a person who tenders property to a motor carrier or
driver of a commercial motor vehicle for transportation in interstate
commerce, or who tenders hazardous materials to a motor carrier or
driver of a commercial motor vehicle for transportation in interstate
or intrastate commerce.
* * * * *
    Transportation intermediary means a person who arranges the
transportation of property or passengers by commercial motor vehicle in
interstate commerce, or who arranges the transportation of hazardous
materials by commercial motor vehicle in interstate or intrastate
commerce, including but not limited to brokers and freight forwarders.
* * * * *
0
10. Add a new Sec.  390.6 to read as follows:

Sec.  390.6  Coercion prohibited.

    (a) Prohibition. (1) A motor carrier, shipper, receiver, or
transportation intermediary, including their respective agents,
officers, or representatives, may not coerce a driver of a commercial
motor vehicle to operate such vehicle in violation of 49 CFR parts 171-
173, 177-180, 380-383 or 390-399, or Sec. Sec.  385.105(b), 385.111(a),
(c)(1), or (g), 385.415, or 385.421;
    (2) A motor carrier or its agents, officers, or representatives,
may not coerce a driver of a commercial motor

vehicle to operate such vehicle in violation of 49 CFR parts 356, 360,
or 365-379.
    (b) Complaint process. (1) A driver who believes he or she was
coerced to violate a regulation described in paragraph (a)(1) or (2) of
this section may file a written complaint under Sec.  386.12(e) of this
subchapter.
    (2) A complaint under paragraph (b)(1) of this section shall
describe the specific action that the driver claims constitutes
coercion and identify the specific regulation the driver was coerced to
violate.
    (3) A complaint under paragraph (b)(1) of this section may include
any supporting evidence that will assist the Division Administrator in
determining the merits of the complaint.

    Issued under the authority of delegation in 49 CFR 1.87: May 5,
2014.
Anne S. Ferro,
Administrator.
[FR Doc. 2014-10722 Filed 5-12-14; 8:45 am]
BILLING CODE 4910-EX-P


[Federal Register Volume 84, Number 86 (Friday, May 3, 2019)]
[Notices]
[Pages 19148-19150]
[FR Doc No: 2019-09018]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85743; File No. SR-NASDAQ-2019-031]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 5702 Concerning an Issuer's Obligation To Disclose Material
Information About the Issuer's Listed Non-Convertible Bonds

April 29, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 15, 2019, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rule 5702 to clarify the fact that
Rule 5250(b)(1) and IM-5250-1, which presently obligate issuers of non-
convertible bonds listed on the Nasdaq Bond Exchange to promptly
disclose to Nasdaq any material information that would reasonably be
expected to affect the value of their listed bonds or influence
decisions to invest in such bonds, includes an obligation to disclose
to Nasdaq material information about the company's equity securities,
even if those securities are listed on a national securities exchange
other than Nasdaq (including, for example, the New York Stock Exchange
(``NYSE'') or the NYSE American market), to the extent that information
about such equity securities also would reasonably be expected to
affect the value of or influence decisions to invest in the listed
bonds.
    The text of the proposed rule change is available on the Exchange's
website at http://nasdaq.cchwallstreet.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In November 2018, the Commission approved amendments to the
Exchange's rules that permit the Exchange to list and trade non-
convertible corporate debt securities (referred to herein as ``bonds''
or ``non-convertible bonds'') on the Nasdaq Bond Exchange.\3\ Under the
Exchange's listing rules, at Rule 5702(a)(2), a non-convertible bond is
eligible for listing on the Exchange only if its issuer concurrently
lists at least one class of an equity security on Nasdaq, NYSE, or NYSE
American. The Exchange noted in its proposal for the Nasdaq Bond
Exchange that upon the effective date of its proposal, the Exchange
would be capable of listing and trading non-convertible bonds only of
issuers that list equity securities on Nasdaq.\4\ The Exchange stated
that it expected to be ready to list and trade bonds of issuers with
equity securities listed on NYSE or NYSE American by the Second Quarter
of 2019.\5\
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    \3\ See Securities Exchange Act Release No. 34-84575 (Nov. 13,
2018), 83 FR 58309 (Nov. 19, 2018).
    \4\ See SR-NASDAQ-2018-070 (as modified by Amendment Nos. 1-3).
    \5\ See id.
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    As the Exchange prepares to begin listing and trading bonds of
issuers of NYSE and NYSE American listed equity securities, it proposes
to further amend its Rules to ensure that it will have access to all of
the information it needs to evaluate whether and when to suspend,
delist, or halt trading in such bonds. Specifically, the proposed
amendment would highlight to issuers that their obligation, under Rule
5250(b)(1) and IM-5250-1, to promptly disclose to Nasdaq material
information that could reasonably be expected to affect the value of or
influence decisions to invest in their Nasdaq-listed bonds, includes an
obligation to promptly notify the Exchange of material news about their
NYSE or NYSE American listed equity securities, to the extent that such
information about such NYSE or NYSE American listed securities could
also reasonably be expected to affect the value of or influence
decisions to invest in the Nasdaq-listed bonds.
    Rule 4000B(i)(1) provides that the Exchange may halt or suspend
trading in non-convertible bonds listed on the Nasdaq Bond Exchange
when: (1) In the Exchange's regulatory capacity, it is necessary or
appropriate to maintain a fair and orderly market, to protect
investors, or is in the public interest, due to extraordinary
circumstances or unusual market conditions; (2) a class of equity that
is issued by the same issuer as the non-convertible bond has been
halted or suspended by, or de-listed from, the Exchange or by its
primary listing market (NYSE or NYSE American), as applicable; (3) news
reports have a material impact on a non-convertible bond, its issuer,
or related stock of its issuer; or (4) the non-convertible bond is to
be called for redemption or will mature or become subject to
retirement, and thereafter it will be subject to de-listing.
    To assist the Exchange in determining when to halt or suspend
trading in non-convertible bonds, Rule 5250(b)(1) and IM-5250-1 require
that, except in unusual circumstances,\6\ Nasdaq listed

companies, including issuers of non-convertible bonds listed on the
Nasdaq Bond Exchange, shall disclose promptly to the public through any
Regulation FD compliant method (or combination of methods) any material
information that would reasonably be expected to affect the value of
their securities or influence investors' decisions. Under Rule 5250 and
IM-5250-1, Nasdaq-listed companies must notify Nasdaq's MarketWatch
Department \7\ prior to the distribution of certain material news at
least ten minutes prior to public announcement of the news when the
public release of the information is made, from 7:00 a.m. to 8:00 p.m.
E.T, or prior to 6:50 a.m., if the company releases the news publicly
other than between 7:00 a.m. and 8:00 p.m.\8\
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    \6\ As set forth in IM-5250-1, companies in unusual
circumstances may not be required to make public disclosure of
material events including, for example, where it is possible to
maintain confidentiality of those events and immediate public
disclosure would prejudice the ability of the company to pursue its
legitimate corporate objectives. However, IM-5250-1 states that
companies remain obligated to disclose this information to Nasdaq
upon request pursuant to Rule 5250(a).
    \7\ Nasdaq's MarketWatch Department monitors real time trading
in all Nasdaq securities during the trading day for price and volume
activity.
    \8\ As set forth in IM-5250-1, such events include: (1)
Financial-related disclosures, including quarterly or yearly
earnings, earnings restatements, pre-announcements or guidance; (2)
corporate reorganizations and acquisitions, including mergers,
tender offers, asset transactions and bankruptcies or receiverships;
(3) new products or discoveries, or developments regarding customers
or suppliers (e.g., significant developments in clinical or customer
trials, and receipt or cancellation of a material contract or
order); (4) senior management changes of a material nature or a
change in control; (5) resignation or termination of independent
auditors, or withdrawal of a previously issued audit report; (6)
events regarding the Company's securities, such as defaults on
senior securities, calls of securities for redemption, repurchase
plans, stock splits or changes in dividends, changes to the rights
of security holders, or public or private sales of additional
securities; (7) significant legal or regulatory developments; or (8)
any event requiring the filing of a Form 8-K.
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    The Exchange construes Rule 5250(b)(1) and IM-5250-1 as already
obligating an issuer of a Nasdaq-listed bond to disclose and to provide
notice of disclosure to the Nasdaq MarketWatch Department of any news
information--including information about the issuer's equity
securities--that is material to the value of or an decision to invest
in the listed bond. For avoidance of doubt, however, the Exchange
proposes to amend Rule 5702 to reiterate and make explicit this
obligation.
    Specifically, the Exchange proposes to reiterate, in new Rule
5702(c), that any company that has non-convertible bonds listed on the
Exchange under Rule 5702 is concurrently obligated, under Rule
5250(b)(1) and IM-5250-1, to promptly disclose and provide notice of
disclosure to Nasdaq's MarketWatch Department of any material
information that would reasonably be expected to affect the value of
the bond or decisions to invest in the bond. The proposal would
emphasize that this obligation extends to material information about
the company's equity securities, even if those securities are listed on
a national securities exchange other than Nasdaq, to the extent that
information about such equity securities also would reasonably be
expected to affect the value of or influence decisions to invest in the
bond. Potentially relevant news about the NYSE- or NYSE American-listed
equity securities would include, among other things, a voluntary or
involuntary delisting of the equity securities, a bankruptcy of the
issuer, a corporate reorganization, a call for redemption of the equity
securities, or a significant legal or regulatory development, such as a
regulatory investigation or action.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\10\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. Specifically, the Exchange believes that the proposal will
promote just and equitable principles of trade by helping to ensure
that bond issuers provide prompt notice to Nasdaq's MarketWatch
Department, in accordance with Rule 5250(b)(1) and IM-5250-1, of all
material news--including material news about the issuer's equity
securities listed on Nasdaq or another national securities exchange--
that can reasonably be expected to affect the value of or influence a
decision to invest in a Nasdaq-listed bond The proposal will protect
investors by ensuring that MarketWatch has the all of the information
it reasonably requires to determine whether to suspend, delist, or halt
trading in a listed bond, as set forth in Rule 4000B(i), and that it
does not lack access to material information that is relevant to the
value of or a decision to invest in the listed bonds due to the fact
that the issuer has disclosed the information to another national
securities exchange in connection with the listing of its equity
securities on that other exchange.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposal is merely intended
to help ensure that the Exchange has the information it needs in all
instances to evaluate whether to suspend, delist, or halt trading in a
Nasdaq-listed bond. The Exchange does not expect that its proposal will
have any impact whatsoever on inter-industry competition. The Exchange
also does not believe that the proposal will have an adverse impact on
intra-industry competition. Although the proposal will specifically
require bond issuers with equity securities listed on other national
securities exchanges to promptly report material news about those
equity securities to Nasdaq, bond issuers with Nasdaq-listed securities
are subject to the same obligation. Moreover, the Exchange does not
expect that its proposal will require issuers to disclose any
information to Nasdaq that they would not otherwise be required to
disclose to NYSE or NYSE American for similar purposes.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, Rule

19b-4(f)(6)(iii) \14\ permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange has asked the Commission to waive the
30-day operative delay so that the proposed rule change may become
effective and operative immediately upon filing. The Exchange states
that the waiver will allow the Exchange, as soon as it begins to list
non-convertible bonds by issuers with equity securities listed on NYSE
and NYSE American,\15\ to have access to information about such
issuers' equity securities that is material to the Exchange's decisions
to suspend, de-list, or halt trading in the bonds.
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ Under Exchange Rule 5702(a)(2), a non-convertible bond is
eligible for listing on the Exchange only if its issuer concurrently
lists at least one class of an equity security on either Nasdaq,
NYSE, or NYSE American.
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    The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
The proposed rule change highlights in the Exchange bond listing rules
the existing obligation of issuers listing non-convertible bonds to
provide the Exchange with all material information that could
reasonably be expected to affect the value of, or influence investors'
decision, concerning Nasdaq listed non-convertible bonds including
material information about an issuer's listed equity securities that
could have such an affect, even if the equity security is listed on
another national securities exchange.\16\ Such material information is
important for the protection of investors and the public interest
because this information will help the Exchange evaluate whether and
when to suspend, de-list, or halt trading in the listed non-convertible
bonds pursuant to Exchange rules. For these reasons, the Commission
hereby waives the 30-day operative delay requirement and designates the
proposed rule change as operative upon filing.\17\
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    \16\ See id.
    \17\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2019-031 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2019-031. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2019-031 and should be submitted
on or before May 24, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-09018 Filed 5-2-19; 8:45 am]
BILLING CODE 8011-01-P