Preliminary Injunction Blocks Enforcement in California, Lauded By Trucking Association
Judge Robert Benitez of the U.S. District Court, Southern District of California on Jan. 16 blocked the state from requiring motor carriers to comply with Assembly Bill 5 (AB-5), which makes it more difficult for a driver to work as an independent contractor. The decision to grant the preliminary injunction means California can’t apply the law to the trucking industry until the California Trucking Association’s (CTA) full case is decided.
CTA contends that AB-5 is unconstitutional and is preempted by the Federal Aviation Administration Authorization Act of 1994, which prevents states from enforcing a law or regulation related to a price, route, or service of motor carriers. “This ruling is a significant win for California’s more than 70,000 independent owner-operators and California Trucking Association members who have worked as independent truckers for decades, and who have invested hundreds of thousands of dollars to own their own vehicle and comply with California’s strict environmental guidelines and regulations over the years,” said Shawn Yadon, CTA CEO.
AB-5, which was signed into law in September, codifies the California Supreme Court’s establishment of the ABC test, which considers all workers to be employees unless the hiring business demonstrates that all of the factors are established: A, that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract and for the performance of the work and in fact; B, that the worker performs work that is outside the usual course of the hiring entity’s business; C, that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
The law, which went into effect on Jan. 1, targeted a variety of industries in the gig economy, among them rideshare services such as Uber and Lyft, and trucking as well. CTA filed a lawsuit against California Attorney Gen. Xaviere Becerra, asserting the B factor of the test would effectively end the owner-operator model in the state.
In a separate but related case, a state court judge determined that AB-5 doesn’t apply to trucking. Los Angeles Superior Court Judge William Highberger ruled on Jan. 8 that the law is preempted by the Federal Aviation Administration Authorization Act of 1994. “Here the requirements of the ABC test…clearly run afoul of Congress’ 1994 determination that a uniform rule endorsing use of non-employee independent contractors should apply in all 50 states to increase competition and reduce the cost of trucking services,” Highberger wrote. Land Line comments that developments in both cases are positive for opponents of AB-5, but the legal battles are likely far from over.
(SOURCE: The Weekly Propane Newsletter, February 3, 2020. Available by subscription)
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