On January 22, 2014, the Federal Motor Carrier Safety Administration (FMCSA) published a new regulation which enables FMCSA to shut down trucking or bus companies that “show egregious disregard for safety compliance, permit persons who have shown egregious disregard for safety compliance to exercise controlling influence over their operations, or operate multiple entities under common control to conceal noncompliance with safety regulations.” This regulation allows FMCSA to revoke carriers’ registration not only if they engage in a pattern of safety violations themselves, but also if they hire an executive who has a pattern of safety violations with another company.
This rule is targeted at the practice of some trucking companies of hiding their safety records by simply reincarnating themselves as new companies with new names-but the same ownership and management. FMCSA’s new rule addresses this shell game by targeting the individual officers of the companies, rather than just entities themselves.
This new rule was prompted by an August 8, 2008 bus crash in Sherman, Texas in which seventeen passengers and the driver were killed and thirty-eight other passengers were injured. Investigations of that crash revealed that the bus company “was a reincarnation of another bus company that had recently been placed out of service for safety violations.” Both companies, which were under the control of the same person, exhibited a “flagrant disregard for safety” and “demonstrated a hazard to the safety of the motoring public.”