Legal Battle Over AB5 for Truckers Continues in Court

Date: Wednesday, August 31, 2022
Source: Sourcing Journal

The court battle over California’s gig-worker law, Assembly Bill 5 (AB5), and its application to independent truckers appears far from over, even with the latest order by a district court judge.

The judge, in the legal case challenging AB5, on Monday tossed a preliminary injunction that temporarily made truckers exempt from the law. The order was assumed to be a foregone conclusion after the Supreme Court refused to hear the case earlier this summer.

However, the California Trucking Association (CTA) and owner-operator drivers that lodged the lawsuit against the state attorney general and others signaled last week they’re far from done.

A status report suggested the CTA and other plaintiffs intend to file a new motion for preliminary injunction by Oct. 11, which would once again keep AB5 from being applied to truckers. A hearing on that motion has not yet been set. A separate motion filed by the Owner-Operator Independent Drivers Association (OOIDA) to join the case as a plaintiff will see briefs filed in September with the hearing date also yet to be set.

For now, the three-prong test used to determine a worker’s status as either a company employee or an independent contractor, codified under AB5, now holds for truckers.

The CTA declined through a spokesperson to comment on Monday’s court order.

Proponents of the law have said it holds employers accountable by offering workers protection from being misclassified and not being paid a minimum wage or other benefits.

It’s been a winding battle across multiple courts leading up to Monday’s decision.

The original 2018 lawsuit pitted the CTA, along with two drivers, against former California Attorney General Xavier Becerra, along with other state employees. The International Brotherhood of Teamsters joined the case in support of the defendants in 2019.

CTA’s legal complaint aimed to have a judge stop AB5, which was signed into law in September 2019, from being enforced. A preliminary injunction was granted in January 2020, while the lawsuit played out in court.

The state and Teamsters challenged that decision in the Ninth Circuit Court of Appeals, which reversed the lower court decision. The CTA and other plaintiffs then sought to have the U.S. Supreme Court hear the case, which was denied in the summer, setting off the wave of trucker protests seen at the San Pedro Bay and Oakland port complexes in July.

The CTA, more specifically, argued in its lawsuit the second prong of the test used to determine a worker’s status states a worker can be considered independent if they perform “work that is outside the usual course of the hiring entity’s business.”

In trucking, owner-operators are providing work related to trucking, making it difficult to see where prong B of the test could be applicable for drivers, the CTA argued.

“Because drivers perform work that is within rather than outside the usual course of a motor carrier’s business, the unavoidable effect of prong B is to automatically classify every driver who works for a motor carrier as an ‘employee’ no matter the actual contractual relationship between driver and the motor carrier,” the CTA complaint said.

The association has estimated some 70,000 owner-operators are impacted by the law.

The CTA expressed disappointment at the time of the Supreme Court decision and raised the question of how commerce and goods movement will be impacted if there are fewer independent truckers on the road.

“The legislature and [California governor Gavin] Newsom administration must immediately take action to avoid worsening the supply chain crisis and inflation,” the CTA said at the time of the Supreme Court decision.

The case, while currently a California matter, is being watched as it could hold implications nationally should other states adopt similar measures. Additionally, a potential shortage of drivers in the midst of the ongoing supply chain disruptions across the country would have implications for retailers, apparel manufacturers and any other industry segments reliant on trucking.

[Read from the original source.]