OOIDA, other groups urge Supreme Court to hear AB5 case

The Owner-Operator Independent Drivers Association asked the U.S. Supreme Court to hear the California Trucking Association’s case against the state’s worker classification law, Assembly Bill 5.

OOIDA was one of more than a dozen organizations to file amicus briefs in support of the California Trucking Association’s petition. The organizations say that AB5 is in violation of the Federal Aviation Administration Authorization Act (F4A), which prevents states from enforcing a law or regulation related to a price, route, or service of motor carriers.

“OOIDA urges the court to grant the petition for certiorari and settle this issue before the trucking industry must bear the burden of restructuring its workforce across the country to comply with California’s labor policy choices,” the Association wrote in its brief filed on Sept. 10.

The U.S. Supreme Court also received amicus briefs from the National Motor Freight Traffic Association, the Minnesota Trucking Association the Western States Trucking Association, the Intermodal Association of North America, the Transportation Intermediaries Association, the U.S. Chamber of Commerce, the American Trucking Associations and Truckload Carriers Association, as well as from various shipper trade organizations, and a joint brief from the other 48 state trucking associations. The Washington Legal Foundation also filed a brief in support of the petition on Aug. 16.

Those groups contend that California’s AB5 violates the F4A and would force the end of the trucking industry’s owner-operator model.

The history

In 2018, 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, California’s 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, and the U.S. Southern District Court of California granted the preliminary injunction to stop the state from enforcing it on motor carriers.

On April 28, the U.S. Court of Appeals for the Ninth Circuit ruled 2-1 that California’s AB5 “is a generally applicable labor law” and called for the removal of a preliminary injunction against enforcing the state law on motor carriers. In June, the Ninth Circuit denied the California Trucking Association’s petition for a rehearing en banc.

The California Trucking Association then filed a petition to the U.S. Supreme Court, and the injunction remains in place until the U.S. Supreme Court makes a decision.

The case

The U.S. Supreme Court receives about 7,000 to 8,000 petitions for review each year and typically elects to hear about only 80 of those cases.

However, the California Trucking Association and the other organizations argue that this is a significant case that the high court should weigh in on.

“We believe the (F4A) prohibits a state statute, such as California’s AB5, that clearly abolishes the historic role within the trucking industry of independent owner-operators,” said California Trucking Association CEO Shawn Yadon. “It is our hope the U.S. Supreme Court will take up this urgent matter of national significance, and we are asking the country’s highest court to fully consider the question of F4A preemption of the ‘all or nothing’ ABC Test and resolve the circuit conflicts that exist on this issue.”

The U.S. Chamber of Commerce said that the Supreme Court needs to resolve a split between the First Circuit and Ninth Circuit on the application of the F4A.

“As the split currently stands, substantially similar worker classification laws are preempted by the F4A in First Circuit jurisdictions but not in Ninth Circuit jurisdictions,” the U.S. Chamber of Commerce wrote. “As a result, motor carriers can contract with independent contractors in some markets but not others. This significantly hampers the national chipping market and prevents motor carriers from competing freely and efficiently with prices, routes and services dictated by the marketplace instead of the state regulation. It also increases costs for businesses and consumers alike, as motor carriers are forced to cope with the expense of regulatory burdens that Congress prohibited in passing the F4A.”

One of the three judges in the Ninth Circuit sided with the California Trucking Association, saying the organization’s members “will now suffer irreparable injury.”

“I do not agree … that a law like AB5 – which affects motor carriers’ relationships with their workers and significantly impacts the services motor carriers are able to provide to their customers – is not related to motor carriers’ services and thus is not preempted,” Judge Mark J. Bennet wrote in his dissent. LL