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Nailed at your FMCSA Safety Audit – Now What?

August 11, 2007

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Neill T. Riddell

Article Originally Published: August 2007

The information contained in this article is not intended to be legal advice. Readers should not act or rely on this information without consulting an attorney.

On a bad day for your company, a Special Agent from the Federal Motor Carrier Safety Administration has arrived at your facility and spent six hours going through your records. At the end of the day he has given you a Safety Compliance Report listing scores of violations in 16 separate safety categories, three of them highlighted as “critical”.

The Report warns that you will be given a proposed safety rating of “Conditional”. It states that you may prepare a “Corrective Action Letter” which must be submitted to FMCSA within 15 days.

You sign a receipt for the Report and the Agent leaves. Now what should you do?

By all means, act immediately. Operating with a Conditional safety rating can drive up insurance costs and freeze you out with particular shippers. A Compliance Report of this type also will likely be followed by an FMCSA Claim assessing a substantial fine. Significant options are available to reduce the impact of a bad Compliance Report.

Corrective Action Letter

Take advantage of submitting a Corrective Action Letter. The letter only needs to state generally how you intend to reduce each of the types of violations described in the Compliance Review. A Corrective Action Letter serves mainly to place a document in FMCSA’s files which shows that the carrier is concerned about safety. Be brief, but get something on file.

Safety Rating

FMCSA follows specific guidelines in deciding whether a safety rating should be downgraded. The regulations break safety violations into six categories and assign points for violations of each category. For all but the most serious violations, a violation rate of greater than 10% of all records surveyed is required in order to establish a category violation.

You have 90 days following the effective date of your proposed new rating to file a written challenge. Review each of the individual claimed violations carefully and decide if they can be challenged on their facts. If enough violations can be challenged to move the violation percentage in one category below 10%, you may be able to cancel the new rating.

Penalty

A bad Compliance Review usually will also result in a Claim Notice from FMCSA seeking a civil fine. The Claim Notice will list the specific violations charged and state a proposed penalty amount.

It is very important that you respond to the Claim within the time periods stated in the Notice. You essentially have 30 days or less to decide between paying the Claim in full, requesting a hearing, or requesting binding arbitration.

Paying the claim in full may not be necessary. FMCSA may be willing to suspend part of a proposed penalty, particularly if a hearing is requested. Arbitration is another option that may allow the penalty to be reduced further.

Do not fail to file some form of timely response in writing. Failure to respond will cause FMCSA to issue a default. Payment of the entire proposed penalty will be required within 90 days in that event. Failure to make payment within that time period will result in suspension of your FMCSA operating authority and penalties of up to $11,000 per day.