California employers got a possible reprieve from California’s Assembly Bill 5, a new law in effect January 1, which was allegedly designed to limit “gig” employers like Uber and Lift from using the “independent contractor” designation rather than making them actual employees.

In the process, the law included millions of other California workers, from beauticians to screenwriters, and especially truck drivers, including those used in construction to haul in materials or haul out debris and excavated soil.

U.S. District Judge Roger Benitez, late on December 31st, issued a temporary restraining order preventing state officials from enforcing the law against motor carriers. 

The California Trucking Association (CTA) filed a lawsuit challenging Assembly Bill 5 in November. The bill passed last year codified a 2018 State Supreme Court decision and put into place a stringent “ABC test” for determining the validity of independent contractor relationships. One of the requirements, the “B part,” prohibited companies from using independent contractors unless the worker was performing work “outside the usual course of the hiring entity’s business.”

CTA contended in its lawsuit that AB 5 is preempted by the supremacy and commerce clauses in the U.S. Constitution and is in direct conflict with the Federal Motor Carrier Safety Act and the Federal Aviation Administration Authorization Act of 1994. (Part of the FAAAA bans states from enacting laws that affected a motor carrier’s prices, routes and services.)

CTA, on Christmas Eve, filed a motion for a temporary restraining order, seeking to keep the state from enforcing AB5 as it relates any motor carrier operating in California, pending the court’s resolution of its previous motion for a preliminary injunction, set for hearing on January 13.

Judge Benitez’s temporary order, opined that the association had shown the case was “likely to succeed on the merits” and that the plaintiffs are “likely to suffer irreparable harm in the absence of relief.”

In response to the restraining order, CTA, in an email, said, “The California Trucking Association appreciates the court for recognizing the harm AB 5 poses to trucking. We can protect workers without crushing independent truckers in the process.”

There are a lot of unanswered questions in this issue, especially given lawsuits such as CTA’s and others, about how long AB 5 will remain law in its current form.

That uncertainty has led to some companies, especially in the trucking arena, taking a wait-and-see attitude, gambling that the legal challenges will be successful.

This issue won’t be settled anytime soon, and the Legislature is back in session.

 

By Ray Baca Executive Director Email: [email protected]