California Trucking Association to request rehearing over AB5

The California Trucking Association will seek a rehearing en banc in its case regarding a state worker classification law, the trucking group confirmed.

A week ago, the U.S. Court of Appeals for the Ninth Circuit determined that California’s Assembly Bill 5 is not preempted by federal law. The court also ruled to remove a preliminary injunction against enforcing AB5 on motor carriers.

The three-judge panel ruled 2-1 that California’s Assembly Bill 5 “is a generally applicable labor law” and rejected the California Trucking Association’s arguments that the Federal Aviation Administration Authorization Act (F4A) preempts AB5 from being applied to the trucking industry.

Judge Mark J. Bennett offered a fiery dissent, saying the California Trucking Association’s members “will now suffer irreparable injury.”

Rehearing en banc

Now, the California Trucking Association is requesting a rehearing en banc, which would allow the case to be heard by all of the judges in the court.

Last week, the state trucking group said it would pursue all steps to fight the law being enforced on the trucking industry.

“We continue to stand by our initial claim that the implementation of AB5’s classification test is preempted by federal law and is clearly detrimental to the long-standing and historical place California’s 70,000 owner-operators have had in the trucking industry,” said Shawn Yadon, CEO of the California Trucking Association.

“The California Trucking Association will take any and all legal steps necessary to continue this fight on behalf of owner-operators and motor carriers operating in California.”

If an attempt at a rehearing is unsuccessful, the next step could be to petition the U.S. Supreme Court.

History

The controversial decision comes about three years after the California Supreme Court’s Dynamex ruling established the ABC Test, which considers all workers to be employees unless the hiring business demonstrates that three factors are established.

A. That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact.

B. That the worker performs work that is outside the usual course of the hiring entity’s business.

C. That the worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.

In September 2019, the California State Senate passed AB5, which codifies the California Supreme Court’s decision. The law, which was intended to apply to a variety of industries, went into effect Jan. 1, 2020.

The California Trucking Association sued over the law, arguing that AB5 was preempted by the F4A, which prevents states from enforcing a law or regulation related to a price, route, or service of motor carriers.

Shortly after AB5 went into effect, the U.S. Southern District Court of California granted the preliminary injunction to stop the state from enforcing it on motor carriers.

Ninth Circuit Judges Sandra S. Ikuta and Douglas P. Woodlock ruled that AB5 is not preempted.

“AB5 is not significantly related to rates, routes, or services,” the judges wrote in their opinion. “Therefore, we conclude that the F4A does not preempt AB5 as applied to motor carriers.”

OOIDA, which filed an amicus brief in support of the California Trucking Association, said it was reviewing the decision and determining next steps to protect truck drivers. LL