Federal Judge Temporarily Blocks AB5 Enforcement Against California Trucking

 

FreightWaves --- A federal judge has handed down a temporary restraining order blocking the January 1 implementation of California’s AB5 against motor carriers.

AB5 is the law restricting the ability of independent operators — including truck drivers — to operate in the state.

In a case brought by the California Trucking Association (CTA) , Judge Roger T. Benitez of the U.S. Southern District Court ordered the state not to enforce AB5 against any motor carrier in California, pending a final resolution of the lawsuit brought by the CTA.

At issue in the judge’s order was the so-called “B Prong” of AB5. AB5 adopted almost verbatim wording from the Dynamex case handed down in California in 2018 which set several tests for when a worker should be considered an employee rather than an independent operator. The B part of the ABC test in Dynamex — the basis for the B prong in AB 5 — said an owner-operator should be considered an employee unless, as Benitez noted, “the person performs work that is outside the usual course of the hiring entity’s business.” A trucking company hiring a truck driver who is independent would not meet that test of independence. A trucking company hiring a cleaning company to tend to its headquarters would meet it.

Key legal arguments against AB5 have focused on the Federal Aviation Administration Authorization Act of 1994. That federal law has wording on the ability of states to regulate motor carriers. Attorneys for CTA have argued that FAAAA pre-empts AB5, and Benitez was persuaded.

In another part of his ruling, Benitez said the CTA and other plaintiffs “are likely to succeed on the merits.” He also ruled that a restraining order is called for because the plaintiffs are “likely to suffer irreparable harm in the absence of relief” and “relief is in the public interest.”

The ruling suggests that a truck driver would almost never be found to be an independent owner-operator under the tenets of AB5. “Because contrary to Prong B, drivers perform work within (court italics) the usual course of the motor carrier hiring entity’s business, drivers will never be considered independent contractors under California law,” Benitez wrote.

And the costs of ignoring the law are significant, he added. “If their interpretation of the statute is correct, Plaintiffs will have to risk criminal prosecution or take significant and costly compliance measures,” he wrote.

LaBar said the next hearing on the case will be Jan. 13.