Truckers scored a “significant win” yesterday when a California judge halted the enforcement of a controversial labor law until further notice.
On Thursday, January 16, a federal judge granted an indefinite extension to a restraining order filed by the California Trucking Association (CTA) against the state of California meant to protect truckers from the enforcement of a labor law known as AB5. This extension could last for months or even years as the legal battle over AB5 is waged in court.
AB5 went into effect on January 1, 2020, and has drawn heavy criticism from members of the trucking industry because it would would force many companies that employ independent contractors to reclassify these workers as employees who are entitled to minimum wage and workers compensation. The CTA estimates that AB5 puts 70,000 owner-operator jobs at risk.
U.S. District Judge Roger Benitez argued that AB5 was at odds with federal law protecting interstate commerce. He wrote, “There is little question that the State of California has encroached on Congress’ territory by eliminating motor carriers’ choice to use independent contractor drivers, a choice at the very heart of interstate trucking.”
Under AB5, a worker 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.
The CTA argues that Prong B of the ABC test (which reads that “That the worker performs work that is outside the usual course of the hiring entity’s business”) is preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA). The FAAAA prohibits any state from “enact[ing] or enforc[ing] a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.”
The CTA’s Shawn Yadon called the ruling “a significant win for California’s more than 70,000 independent owner-operators and CTA members who have worked as independent truckers for decades.”