California Trucking Association Ends AB 5 Legal Fight
[Stay on top of transportation news: Get TTNews in your inbox.]
The California Trucking Association is ending its yearslong legal battle against the state’s controversial AB 5 worker reclassification law, which the group has long maintained forces independent truck drivers to become motor carrier employees.
CTA CEO Eric Sauer said in a statement that after four-and-a-half years of litigation, the group has decided not to pursue further appeal of a federal district court judge’s recent denial of a federal-level preemption of the state law. The 9th Circuit Court of Appeals also denied CTA’s effort to block implementation of the law.
“While we strongly believe that the [District] Court’s initial finding of preemption was correct, California and the legislation’s union sponsors had to take the position that the state’s 70,000 owner-operators had a right to conduct business in the state in order to overcome our arguments,” the statement said. “This is a win for the working class entrepreneurs that make up the backbone of the state’s supply chain.”
Through a CTA spokesman, Sauer declined a request for an interview.
Sauer
The CTA decision to opt out comes after a federal district court on March 15 denied the association’s renewed motion for a preliminary injunction and merits trial.
Despite the CTA withdrawal, the Owner-Operator Independent Drivers Association — which joined CTA early in the case — has decided to move forward with its own appeal of earlier denials by both the district court and the 9th Circuit, according to OOIDA President Todd Spencer.
“We’re the last one standing,” Spencer told TT. “Everyone else is gone. Anything that affects half of our membership negatively, we’re going to push back on. And we think California has gone too far.”
In its opening appeal brief filed Aug. 5, OOIDA said the California law’s so-called ABC test for proving that a person is an independent contractor requires in part that the worker “performs work that is outside the usual course of the hiring entity’s business.”
RELATED: California’s AB 5 Goes Into Effect, Leaves Questions for Carriers, Owner-Operators
“This provision effectively prohibits an entire sector of small business truckers from operating in California — individual truck owners and operators who lease their truck and driving services to move freight as independent contractors for motor carriers,” OOIDA wrote. “Because leased owner-operators’ work is within motor carriers’ usual course of business — moving freight by truck — they cannot work as independent contractors for motor carriers under the three-pronged ABC test. This prohibition of leased owner-operators was not an accidental byproduct of a law that was purportedly passed to address worker misclassification.”
The B-prong of the law requires that the individual be customarily engaged in an independently established business. In past legal filings, CTA also claimed that the ABC test cannot be enforced against the trucking industry and stressed that AB 5 would force owner-operators to become motor carrier employees.
Cox Automotive's Kevin Clark discusses how dynamic parts management can transform your fleet services. Tune in above or by going to RoadSigns.ttnews.com.
So far, California regulators have not attempted to enforce the law — which took effect in 2020 — nor have they clarified their specific interpretation of it.
In legal documents, CTA noted that motor carriers across the United States have for decades provided freight transportation services through owner-operators — individuals who drive their own trucks and operate as independent contractors.
“Congress has recognized the critical role that owner-operators perform in interstate commerce, including through the Federal Aviation Administration Authorization Act,” CTA said in a legal brief. “In 2019, however, California passed Assembly Bill 5, now codified in California labor code.”
The so-called F4A law prohibits states from “enacting or enforcing a law, regulation or other provision having the force and effect of law related to a price, route or service of any motor carrier.”
Want more news? Listen to today's daily briefing below or go here for more info:
