Dive Brief:
- A federal judge ruled against the California Trucking Association and Owner-Operator Independent Drivers Association Friday, delivering a blow to the groups’ efforts to upend California’s AB5 law. The groups have sought to shield interstate truckers from the independent contractor classification labor regulation.
- The measure, signed into law in 2019, uses a three-part test to determine whether independent contractors must be classified as employees. Its implementation has been delayed by a series of court challenges from the trucking industry seeking to protect the owner-operator model used by many fleets.
- “Remedying complexities and perceived deficiencies in AB5 are the kind of work better left to the soap box and the ballot box than to the jury box,” Judge Roger Benitez of the Southern District of California wrote in the decision. “The courts ... are not the proper bodies for imposing legislative amendments.”
Dive Insight:
California’s three-part test for whether independent contractors are considered employees seeks to evaluate each job’s unique circumstances.
To challenge that, the CTA and OOIDA argued that a federal law preempted the state law. At issue was the Federal Aviation Administration Authorization Act of 1994, which provides broad authority for the federal government to keep states from interfering with interstate transportation, notably in matters of price, route or service.
This federal override is broad, “but not so broad that the sky is the limit,” the judge wrote, adding that “states retain the ability to execute their police power with laws that do not significantly impact rates, routes, or services.”
The case began in 2018 with CTA along with two owner-operators, and OOIDA joined last year with an intervenor complaint. OOIDA attorney Paul Torlina told Trucking Dive last week prior to the decision that while AB5 is in effect, it is not being enforced.
The trucking group quickly defended its efforts following Friday’s decision.
“OOIDA disagrees with Judge Benitez's ruling and the reasoning behind it and is exploring all options moving forward — including an appeal,” the organization told Trucking Dive in an email.
Among its arguments, OOIDA noted that exemptions to the AB5 law exist, including within the construction industry. But Benitez wrote in his decision that this exemption expires at the end of this year.
Another case challenging AB5 involves Uber driver Lydia Olson and the company, which argued the ride-hailing and gig worker industries were unfairly targeted. The case is headed back to court after the 9th U.S Circuit Court of Appeals ruled for the case to be reheard. Oral arguments are slated for Wednesday in San Francisco.
