The Supreme Court’s unanimous ruling in Montgomery v. Caribe Transport II rang loudly for freight brokers, logistics providers, shippers, and any business that relies on motor carriers or independent contractor drivers.
According to Doug Grawe, Openforce General Counsel, “The message is clear: vendor and carrier vetting is not just an operational checkpoint. It is a legal risk management function. If your organization hires or engages motor carriers, independent contractor drivers, or third-party transportation providers, your selection process, documentation, insurance verification, and ongoing monitoring may now become central to your defense in the event of a claim.
The case stemmed from a serious crash involving Shawn Montgomery, who was parked on the side of an Illinois highway when a truck operated by Caribe Transport II veered into him. Montgomery lost a leg and suffered permanent injuries. C.H. Robinson, the freight broker on the load, was also named in the lawsuit. Montgomery alleged that the broker negligently hired a carrier with a “Conditional” FMCSA safety rating, documented citations, and critical violations on record. At the center of the case was a key legal question: Does the Federal Aviation Administration Authorization Act, or FAAAA, preempt state-law negligent hiring claims against freight brokers? The Court said no.
Anyone in the supply chain, shipper, broker, logistics provider, now faces direct exposure for the carriers and vendors they choose to hire. For example, a broker can now be sued under state law for negligently hiring an unsafe motor carrier or independent contractor driver. The federal preemption shield is gone.
To provide clarity, Grawe added, “The Court did not hold that brokers are automatically liable every time an accident happens. Brokers who exercise reasonable care in carrier selection, who document their vetting, apply consistent standards, and make thoughtful qualification decisions, have strong defenses when they do get sued.” In short, those best positioned after this ruling will be the ones that can prove they had a reasonable, consistent, documented process in place before something went wrong.
This is not a “wait and see” moment. The decision impacts the risk environment for brokers, shippers, logistics companies, and contracting businesses today. Plaintiffs may increasingly look beyond the motor carrier or driver involved in an accident and examine every party involved in selecting, onboarding, or dispatching that carrier.
Grawe added, “That means the question after an incident may no longer be limited to, What happened on the road? It may also include: What did you know about the carrier before engaging them? What safety data did you review? Did you verify insurance? Did you document your decision-making process? Were your standards applied consistently? Did you re-check credentials, coverage, or eligibility over time? And if the answer is unclear, inconsistent, or undocumented, that gap can create risk.”
Businesses should focus on reviewing their carrier and vendor selection processes.
Audit your selection criteria: Start by reviewing how your organization evaluates carriers, vendors, and independent contractor drivers. What data points are you collecting? Who reviews them? What standards are used to approve, deny, or escalate a candidate? A defensible process should be clear, repeatable, and applied consistently.
Review data sources: Review your data sources for making qualification decisions. Consult with your risk management advisors to determine whether FMCSA safety ratings, FMCSA data, and other public data sources are available and appropriate for your review during your qualification process.
Verify insurance, and keep verifying it: Collecting a certificate of insurance during onboarding is a good start. You may want to consider going further by establishing recurring insurance verification practices. A strong process should answer not only whether insurance was collected, but whether it was current, and aligned with your requirements.
Consistency and documentation: Courts have found companies that can show that it followed a reasonable vetting process, applied standards consistently and reasonably, and maintained records of its decisions, may be better positioned to defend against negligent hiring claims. Without documentation, even a well-intentioned process can be difficult to prove.
Talk to your insurance agent now: Do not wait until after an accident to understand your coverage. Review your liability policies, exclusions, and post-incident reporting requirements. Make sure your team knows what to do, who to contact, and what information to preserve if an incident occurs.
Your vetting process is one critical aspect of your legal defense against negligent hiring and entrustment claims. With Openforce’s technology you can build, manage, and document a strong vetting process for your business. The Openforce platform is designed to support consistent, auditable independent contractor onboarding and management. Every workflow, confirmation, document, and insurance verification can help create the proof businesses need to show that they followed a reasonable process.
The Montgomery decision is part of a broader trend toward increased accountability across the supply chain. Brokers, shippers, logistics providers, and companies that rely on carriers and independent contractor drivers may face greater scrutiny over who they choose to work with and how those decisions are made.
Additional legislative responses may come. Industry groups may push for changes. Some states may take their own approach to limiting or defining negligent hiring claims. But businesses cannot build their risk strategy around what legislatures may do later. Under today’s laws, carrier and vendor vetting deserve the same discipline, documentation, and consistency as any other core compliance function. Companies that already treat vetting this way may find themselves in a stronger position. Companies that do not, should act now to close the gap. Contact your legal and risk management advisors to discuss the details of your operation and qualification processes and review for potential updates.
If you are not a current Openforce client, schedule time to learn more about Openforce contractor management solutions here.
Openforce clients will have access to a special on-demand educational webinar led by Doug Grawe, Openforce General Counsel, and Franz Schneider, Chief Product Officer. Together, they will discuss the Montgomery decision, associated risks, and building stronger, more defensible onboarding and vetting practices. Strategic Account Managers will send out details shortly.