Judge reinstates Trump independent contractor rule

On March 14, 2022, U.S. District Judge Marcia Crone of the Eastern District of Texas invalidated the Biden administration’s action on and reinstated the Trump administration’s independent contractor rule. The Trump rule, issued on January 6, 2021, was supposed to take effect in March 2021.

In the decision, Coalition for Workforce Innovation v. Walsh, Judge Crone found the Biden administration’s delay of the rule violated the Administrative Procedures Act (APA) by:

Providing only a 19-day notice-and-comment period rather than 30 days, which has been recognized as the minimum under the APA; Limiting the content of responses to the question of whether to delay the effective date, which limited the scope of the comments; and Making the delay effective immediately upon the issuance of the Final Rule, delaying implementation rather than waiting the 30-day APA waiting period without good cause.

The court then held the U.S. Department of Labor’s (DOL) rulemaking withdrawing the Final Rule was arbitrary and capricious under the APA because it limited comments to the question of whether to withdraw the rule rather than allowing the public to propose other alternatives.

The court tossed out the Biden administration’s rulemaking and held the rule “became effective as of March 8, 2021, the rule’s original effective date, and remains in effect.”

The Biden administration has not indicated whether it will appeal the decision to the 5th Circuit Court of Appeals or whether it will engage in additional rulemaking on independent contractors.