California trucker complaint seeks to overturn AB5

California trucker complaint seeks to overturn AB5

Since it was signed into law in September, AB5 has generated rumors and confusion throughout California, especially at the ports of Los Angeles, Long Beach (above), and Oakland. Photo by Shutterstock.com.

The California Trucking Association (CTA) and two owner-operator drivers on Tuesday filed an amended complaint with a federal court, stating that the “employment test” in Assembly Bill 5 (AB5) violates the supremacy and commerce clauses in the United States Constitution.

AB5, which the framers in the California Legislature say addresses misclassification of drivers as independent contractors rather than employees, actually replaces a longstanding, multi-factor test for determining independent contractor status with a “one-size-fits-all” method of determining employment status, the trucking association said in a statement.

If AB5, which was signed into law by Gov. Gavin Newsom on Sept. 11, becomes law on Jan. 1 as scheduled, the ability of more than 70,000 truckers in California to provide services as independent owner-operators will be restricted, Shawn Yadon, CTA CEO, said Tuesday.

AB5 would replace the traditional “ABC test” for determining whether a truck driver should be classified as an independent contractor. The three requirements in the ABC test are: The person is free from the control of the hiring entity; the person performs work that is outside the usual course of the hiring entity’s business; and the person is customarily engaged in an independently established occupation of the same nature as the work performed by the hiring entity.

The CTA in October 2018 filed its original suit stating that AB5 is preempted by the supremacy and commerce clauses in the US Constitution and is in direct conflict with the Federal Motor Carrier Safety Act (FMCSA) and the Federal Aviation Administration Authorization Act (FAAA) of 1994.

Chris Shimoda, vice president of government affairs at CTA, told JOC.com Tuesday the amended complaint was filed because last year’s lawsuit was filed before AB5 was signed. Now that AB5 has been signed into law, the trucking association decided to expand the scope from a few limited stipulations covered in the lawsuit, such as minimum wage and rest requirements, to cover a larger list of business practices.

As matters stand now, AB5 is still scheduled for implementation on Jan. 1, unless some action is taken, such as an injunction by a court blocking implementation until outstanding legal challenges are addressed, Shimoda said.

Violation of the FAAA was first addressed in the Port of Los Angeles Clean Truck Act of 2006. The port’s original proposal included a provision that in order to serve the port, harbor truck drivers must be employees. The US Supreme Court in 2013 found the employee-driver requirement to be a violation of the FAAA.

Since it was signed by Newsom in September, AB5 has generated rumors and confusion throughout California, especially at the ports of Los Angeles, Long Beach, and Oakland. A persistent rumor is that drivers with trucking companies not in compliance with AB5 would be turned away from terminals on Jan. 2.

The ports on Tuesday debunked that. “They won’t be denied entrance to the port based on imposition of AB5,” said David Libatique, deputy executive director of stakeholder engagement at the Port of Los Angeles. “The state will be using a different test to be determining whether drivers are employees or contractors, but that’s not up to us to determine, check upon, or enforce.” 

The confusion could rest in part on a different bill, California Senate Bill 1402, that addresses actions by trucking companies that had already received unsatisfactory judgments involving driver misclassification.

“In the next iteration of the clean truck program, we will require companies to comply with state laws such as SB 1402,” Libatique said. 

The Los Angeles-Long Beach Clean Truck Program of 2006 is updated every few years. An AB5 violation could eventually get a trucking company on the list established through SB 1402, but it would require a group of drivers to sue, win their case, and the carrier refusing to pay damages.

Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.