Temporary restraining order extended in AB5 lawsuit
January 14, 2020
After listening to about two hours of oral arguments, a federal judge reportedly extended a temporary restraining order that blocks California from forcing motor carriers to comply with the state’s worker classification law known as Assembly Bill 5.
As part of a Jan. 13 hearing on the California Trucking Association’s motion for a preliminary injunction, U.S. District Court Judge Roger Benitez declined to make an immediate decision but extended the temporary restraining order. Benitez granted the original restraining order on Dec. 31.
#AB5 Lawsuit Update: After two hours of oral argument, the court has taken matter under advisement. Temporary restraining order (TRO) extended pending decision on preliminary injunction.
— CA Trucking Assoc. (@Caltrux) January 13, 2020
The California Trucking Association’s lawsuit seeks relief from California’s AB5, which was signed into law in September. AB5 codifies the California Supreme Court’s establishment of the ABC test, which considers all workers to be employees unless the hiring business demonstrates that all of the 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.
AB5, which isn’t exclusive to trucking, took effect on Jan. 1.
However, the California Trucking Association contends that the law doesn’t apply to trucking because it is preempted by the Federal Aviation Administration Authorization Act of 1994, called F4A for short. As part of his decision to grant the temporary restraining order on Dec. 31, Benitez said the trucking group established that the law could cause imminent, irreparable harm to motor carriers.
“Plaintiffs have shown that AB5’s Prong B is likely preempted by the (F4A) because AB5 effectively mandates that motor carriers treat owner-operators as employees, rather than as the independent contractors that they are,” Benitez wrote.
The trucking group says the F4A prevents states from regulating the trucking industry.
“A state … may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier or any motor private carrier, broker or freight forwarder with respect to the transportation of property.”
According to the Ogletree Deakins Law Firm, which represents the California Trucking Association, the temporary restraining order will remain in place pending the court’s ruling on the preliminary injunction motion. No timetable was provided on when the court will make a decision.
In a separate but related case, a state court judge determined that AB5 doesn’t apply to trucking. Los Angeles Superior Court Judge William Highberger ruled on Jan. 8 that AB5 is preempted by the F4A.
“Here the requirements of the ABC test … clearly run afoul of Congress’ 1994 determination that a uniform rule endorsing use of nonemployee independent contractors should apply in all 50 states to increase competition and reduce the cost of trucking services,” Highberger wrote.
Developments in both cases are positives for opponents of AB5, but the legal battles are likely far from over.
“This is just the beginning of what is expected to be a very long legal challenge,” the Owner-Operator Independent Drivers Association wrote to its more than 160,000 members on Jan. 10. “OOIDA’s legal team is currently reviewing these rulings, other pending lawsuits, and options for legal action of our own. We’ve always maintained that misclassification in trucking is a very real issue, but California’s legislative approach was overly broad and unnecessarily chaotic. Simply outlawing independent contractors in trucking is unacceptable.”