In a pivotal legal showdown, the California Trucking Association (CTA) is once again challenging the state’s AB5 independent contractor law, which has significant implications for the trucking sector. The court hearing on November 13, 2023, marks the first in-person appearance since early 2020 and involves attorneys from the CTA, the state, as well as new participants, including the Owner-Operator Independent Drivers Association (OOIDA) and the Teamsters.
The legal history of this case dates back to 2019 when Judge Roger Benitez issued a preliminary injunction against AB5, citing conflict with the Federal Aviation Administration Authorization Act (F4A) of 1994. However, the 9th Circuit Court of Appeals overturned this decision more than seven months later. Now, lawyers are back before Judge Benitez to debate the CTA’s latest request for a new injunction against AB5 in the trucking industry while the full case proceeds.
AB5, a state law employing the ABC test to define independent contractors, poses a unique challenge for the trucking sector, particularly due to the B prong requiring work outside the usual course of the hiring entity’s business. The CTA argues that AB5 negatively impacts the trucking industry by restricting the use of independent owner-operators.
The legal arguments presented by both sides cover various aspects:
- F4A Preemption Argument:
- CTA/OOIDA: F4A preempts state action affecting “price, route, or service,” claiming AB5 has that potential.
- State Response: The 9th Circuit concluded that AB5 is not preempted by F4A, as it is a generally applicable law not significantly related to rates, routes, or services.
- Exemptions Under AB5:
- CTA/OOIDA: Trucking lacks rational exemptions seen in other industries, suggesting targeted discrimination.
- State Response: Legislators had evidence of rampant misclassification in trucking, justifying inclusion in AB5; exemptions exist for valid reasons.
- Burden on Interstate Commerce:
- CTA/OOIDA: B2B exemption treats intrastate and interstate drivers differently, violating the Dormant Commerce Clause.
- State Response: The Supreme Court allows practical effects favoring in-state entities, citing B2B exceptions benefiting companies.
- Impact on Trucking and F4A Protection:
- CTA/OOIDA: AB5 disrupts trucking, affecting “price, route, or service” protection under F4A.
- State Response: No substantial evidence of disruption; AB5 is not causing significant impacts on the industry.
The CTA and OOIDA also argue that AB5 disproportionately affects the trucking sector by limiting the use of independent contractors and forcing owner-operators to become employees.
The court hearing will likely provide further insights into the ongoing legal battle, with the CTA seeking an injunction to prevent AB5 enforcement in the trucking industry while the case progresses. The arguments and counterarguments, backed by extensive documentation, highlight the complexities and stakes involved in this legal dispute.
Note: The article is based on information available as of November 10, 2023, and is a summary of the original article by John Kingston published on that date. All citations and quotes are from the original source.
