[Stay on top of transportation news: Get TTNews in your inbox.]
A federal judge in San Diego on Jan. 16 issued a preliminary injunction against the trucking component of a California law that would restrict how independent workers can be classified by companies. The judge’s ruling means the state of California cannot implement the law as it pertains to the trucking industry.
Judge Roger Benitez of the Southern District Court of California extended indefinitely his order banning implementation of the trucking component in California’s Assembly Bill 5. The legislation, which was set to take effect Jan. 1, potentially would reclassify tens of thousands of independent contractors as employees. He had previously issued a temporary restraining order against the law, which was challenged in court last year by the California Trucking Association.
In his order the judge wrote, “There is little question that the State of California has encroached on Congress’ territory by eliminating motor carriers’ choice to use independent contractor drivers, a choice at the very heart of interstate trucking. In so doing, California disregards Congress’ intent to deregulate interstate trucking, instead adopting a law that produces the patchwork of state regulations Congress sought to prevent. With AB 5, California runs off the road and into the preemption ditch of the FAAAA. Accordingly, plaintiffs’ motion for a preliminary injunction is GRANTED.”
The FAAAA is the 1994 Federal Aviation Authorization Act, which was enacted for the purpose of “preventing states from undermining deregulation of interstate transport.”
Critics fear the law would remove opportunities for drivers to own their own businesses and work as independent owner-operators in the state.
“We are very pleased with Judge Benitez’s decision to grant this preliminary injunction against AB 5 for the independent owner-operators. It’s something we have been fighting for, for a long time,” California Trucking Association President Shawn Yadon told Transport Topics.
BREAKING NEWS: The U.S. Southern District Court today granted a preliminary injunction to enjoin enforcement of California’s new employment classification test against motor carriers.— CA Trucking Assoc. (@Caltrux) January 16, 2020
Read more: https://t.co/MCxBySlptK pic.twitter.com/ZoDufAqGXJ
The Western States Trucking Association, which supports CTA in the case, said it was pleased with the ruling but wants to delve into the details.
“We’re thrilled with the decision, but we are having our lawyers look at it, in terms of the broad applicability, we’re going to be getting ahold of the State Attorney General’s office to find out if they believe it includes all trucking, including construction trucking, because construction trucking is covered by an entirely different provision in AB 5,” said Joe Rajkovacz, the group’s director of government relations.
In an email to TT, the California Attorney General’s office did not indicate if it plans to appeal the ruling.
“Our office has and will continue to defend laws that are designed to protect workers and ensure fair labor and business practices. We’re reviewing today’s decision,” the statement read.
Other portions of the law not related to trucking remain in effect.
Judge Benitez’s ruling will remain in effect until he schedules a hearing on the next steps on the case.
“We know we have to be ready for the next steps at the District Court level,” Yadon said. “We were pleased when he ruled on Jan. 13 to extend the Temporary Restraining Order, and at that point, whatever time point it took was going to be fine with us.”
In a separate case, on Jan. 8, Los Angeles Superior Court Judge William Highberger ruled that an independent contractor/employee test required by AB 5 is preempted by FAAAA. This ruling exempts Camden, N.J.-based motor carrier NFI from the law.
“The record before the court in this case confirms the commonsense conclusion that AB 5 would have a substantial impact on trucking prices, routes and services, as motor carriers in California revamp their business models either to utilize only employee drivers or attempt to satisfy the business-to-business exception,” Highberger wrote.
NFI operates approximately 50 million square feet of warehouse and distribution space, and its company-owned fleet consists of more than 3,000 tractors and 12,500 trailers. It ranks No. 19 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
A spokesman for the Los Angeles City Attorney’s Office said it intends to appeal the decision regarding NFI.
“The future of California’s AB 5 is uncertain and continues to be a lightning rod law in trucking,” said Gregory Feary, the president and managing partner of law firm Scopelitis, Garvin, Light, Hanson & Feary, P.C. in Indianapolis.
Staff Reporters Eric Miller and Roger Gilroy also contributed to this article.
Want more news? Listen to today's daily briefing: