The California Trucking Association (CTA) has filed a federal lawsuit in California to try to stop an impending law that they say threatens the livelihood of tens of thousands of truck drivers.
On Tuesday, November 12, the CTA and two California-based owner-operators filed suit in the U.S. District Court of the Southern District of California, asking the court to block Assembly Bill 5 (AB 5).
AB 5, which goes into effect on January 1, 2020, would force many companies that employ independent contractors to reclassify these workers as employees who are entitled to minimum wage and workers compensation.
An employer who violates AB 5 would risk costly fines.
The CTA’s lawsuit argues that AB 5 infringes on interstate commerce and threatens the ability of approximately 70,000 independent truckers within the state to earn a living.
From the suit:
As a practical matter, for a motor carrier to comply with the Labor Code and Wage Order No. 9—which include detailed requirements governing hours and days of work, minimum wages, reporting-time pay, meal periods, rest periods, uniforms and equipment, recordkeeping, itemized wage statements, reimbursement, and other matters—the motor carrier must exercise significant control over each driver’s route and working conditions. It would be impracticable if not impossible for CTA’s motor-carrier members to continue using the owner-operator model, under which they contract with independent drivers to perform particular shipments, while exercising the degree of control over the drivers that would be required to ensure compliance with the Labor Code and Wage Order No. 9. Therefore, to avoid violating the Labor Code and Wage Order No. 9 under the new ABC test, motor carriers operating in California, including CTA’s members, will be forced to discontinue using the owner-operator model and instead use only employees to provide trucking services to their customers.
The suit also points out that many California owner-operator have spent thousands of dollars on CARB-compliant trucks, an investment that they say AB 5 would render useless.
Under AB 5, a workers must pass the “ABC Test” to be labeled as an independent contractor — meaning the worker must be free from control of the company, the worker must perform work “outside the usual course of the hiring entity’s business”, and the worker must be engaged in an independently established trade or business of the same nature as the work that they are performing.
CTA CEO Shawn Yadon said, “Independent truckers are typically experienced drivers who have previously worked as employees and have, by choice, struck out on their own. We should not deprive them of that choice. We can protect workers from misclassification without infringing upon independent truckers’ right to make a living in California.”