California’s AB5 response due March 29
March 6, 2023
California and the International Brotherhood of Teamsters will have a little more time to respond to a motion asking for a preliminary injunction against enforcement of AB5 on the trucking industry.
The California Trucking Association and Owner-Operator Independent Drivers Association contend that the state’s controversial worker classification law, Assembly Bill 5, is unconstitutional. In December, OOIDA filed a motion in the U.S. District Court for the Southern District of California. AB5 codified the ABC Test, which makes it more difficult for a worker to be considered an independent contractor.
California and the Teamsters, which is serving as intervenor for the state, had until March 8 to respond to the motions for an injunction. Citing “unforeseen health issues” to a witness providing a declaration of fact, California and the Teamsters told the court it needed more time to submit their opposition brief.
The groups will now have until March 29 to respond. The California Trucking Association and OOIDA will then have until April 19 to reply, and a hearing is scheduled for May 22.
California passed AB5 into law in 2019. Opponents of the law argued it would force the end of the owner-operator model in the state.
The California Trucking Association received a preliminary injunction in 2019 based off arguments that the law violated the Federal Aviation Administration Authorization Act. The injunction remained in place until this past June, when the U.S. Supreme Court died the state trucking group’s petition for a hearing.
A second round of court battles will largely focus on the Commerce Clause. OOIDA, which is now serving as an intervenor, says AB5 violates protections to engage in interstate commerce free of undue burdens and discrimination by state governments.
“(OOIDA) seeks a preliminary injunction enjoining the enforcement of Assembly Bill 5 as to those motor carriers who operate in interstate commerce or, in the alternative, as to motor carriers whose drivers are not based in California and spend less than 50% of their working time in California,” the Association wrote in the motion.
Danny Schnautz, the owner of Clark Freight Lines in Pasadena, Texas, provided the court a concrete example.
He said his company previously ran about eight to 10 loads in and out of California for up to $50,000 in revenue each week.
However, Schnautz said the uncertainty of whether or not California’s law would apply to out-of-state motor carriers has forced them to stop operating in the state and has led them to miss out on that revenue.
The California trucking group told the court that the state ignored the trucking history’s long history and never provided any guidance on how longstanding businesses could remain in compliance with the statute.
“For decades, motor carriers across the United States have provided freight transportation services through owner-operators – individuals who drive their own trucks and who operate as independent contractors,” the California Trucking Association wrote.
“The state defendants have never articulated how a motor carrier can possibly satisfy the statute, including Prong B of the ABC Test, and they remain intent on enforcing (the law) against motor carriers. They thus continue to threaten irrevocable harm to plaintiffs and the owner-operators who have built businesses in reliance on federal law.” LL