9th Circuit Court of Appeals Rules Truckers Are No Longer Exempt From AB 5
The 9th U.S. Circuit Court of Appeals ruled 2-1 on Wednesday that truckers would no longer be exempt from the state’s AB 5 worker classification law, forcing many to become employees rather than independent contractors.
In September 2019, California passed Assembly Bill 5, a then-bill that set to limit independent contractors, confirm union representation rights, and ensure employee rights to full-time employees. The new law would also drastically increase the number of employees due to the strict ABC test that essentially made all workers employees unless 3 certain factors were met.
Trucking was one of the first industries to go out against the law. In the lead up to AB 5 becoming law on January 1, 2020, driver leasing companies saw a huge spike in business from places that couldn’t retain drivers who were employees. Most companies relied on truckers for flexibility and picking and choosing when certain things were shipped as well, with many fearing a trucking crunch in the state.
However, shortly after AB 5 became law, truckers became exempt thanks to a Los Angeles County Superior Court ruling that found AB 5 covering truckers was unconstitutional. Specifically, it found that the 1994 Federal Aviation Administration Authorization Act (FAAAA) said that states are prohibited from enforcing laws that give “a price, route or service of a motor carrier with respect to the transportation of property.” Effectively, it gave independent truckers the right to operate in every state to both make uniform federal laws possible for easy interstate commerce and to create fair competition.
The trucker exemption sparked a revolt by many industries to fight against being included in AB 5. This culminate in AB 5’s flagship industry that needed to receive the new employee rules, rideshare drivers, being exempt via a statewide proposition in November.
However, despite the law crumbling in other industries, the trucker exemption was brought to the appellate court by the California attorney general and the International Brotherhood of Teamsters, who argued that they should be covered under AB 5.
Despite oral arguments being presented back in September 2020, multiple factors delayed the decision from coming out until Wednesday.
In their ruling, the Appellate Court found that AB 5 was applicable to truckers, and that the FAAAA did not block them from being covered under the new law.
During oral arguments in September, the California Trucking Association (CTA) argued against truckers falling under AB 5, even using the words of AB 5 author, Assemblywoman Lorena Gonzalez (D-San Diego), against it.
“It contains numerous exceptions for numerous industries and professions categorically and contains other exceptions for other industries and professions that are conditionally available,” noted CTA lawyer Andrew Tauber last year. “It actually specifically targets the trucking industry.
“[Gonzalez] says AB5 was designed to eliminate what she characterized as the ‘outdated’ model whereby motor carriers use independent owner-operators to deliver services to their customers. So it simply can’t be maintained on the record that this was a law of general applicability.”
Court rules 2-1 in favor of AB 5
However, Appellate Judges Sandra S. Ikuta and Douglas P. Woodlock didn’t agree, finding that the FAAAA simply didn’t cover truckers due to not being related to rates, routes, or other associated services.
“AB 5 is a generally applicable labor law that affects a motor carrier’s relationship with its workforce and does not bind, compel or otherwise freeze into place the prices, routes or services of motor carriers,” said the judges in their decision on Wednesday. “Therefore, we conclude that the FAAAA does not preempt AB 5 as applied to motor carriers.”
Judge Mark J. Bennett dissented, reiterating that he found that the truckers should…