Truckers granted restraining order against law affecting 70,000 owner-operators

AB5

A federal judge granted truckers in California temporary relief against a labor law that could threaten the jobs of tens of thousands of owner-operators.

On New Year’s Eve, the U.S. District Court for the Southern District of California granted a temporary restraining order that will prevent the state from enforcing the controversial labor law AB5 against truck drivers.

AB5, which went 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. Employers who violate AB5 risk paying large fines.

The lawsuit asking for relief from AB5 was filed by the California Trucking Association (CTA) on November 12. The CTA argued that argued that AB5 infringes on interstate commerce and threatens the ability of approximately 70,000 independent truckers within the state to earn a living.

The temporary restraining order will remain in place until January 13, when a hearing is scheduled for the CTA’s request for a preliminary injunction against AB5.

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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.”