ASSOCIATION INSIGHTS
TCA: California’s AB5 to be Appealed to United States Supreme Court
A
s a part of its Legal Comment offering to its membership, TCA’s Legal Counsel R. Eddie Wayland, recently shared with members the
Ninth Circuit Court of Appeals’ (which oversees California, Oregon, Washington, Arizona, Nevada, Idaho, Montana, Alaska, and Hawaii) decision to overturn an injunction banning the enforcement of California’s AB5 against the trucking industry. AB5 is the California law that involves the factors and tests for determining independent contractor status in California. With that ruling, the State of California and its agencies were permitted to begin enforcement of AB5 against motor carriers. In
a significant development since that ruling, the Ninth Circuit’s decision will be appealed to the United States Supreme Court and enforcement of AB5 has again been halted pending review by the Supreme Court.
Background
In 2019, California passed into law Assembly Bill 5 (“AB5”) which established the presumption that workers are employees unless: (A) the worker is free from the control and direction of the hiring entity; (B) the worker performs work that is outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business. As you may recall, at that time we informed readers of the dangers of AB5 and the negative impact it could have on the trucking industry, particularly those motor carriers who utilize owner-operators and independent contractor drivers. When AB5 was challenged in court, the federal district court held that AB5’s ABC test was in direct contravention of the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”), and granted an injunction preventing the enforcement of AB5.
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