A civil action filed in Superior Court by the California attorney general against Pac Anchor Transportation and truck owner Alfredo Barajas alleged the motor carrier had improperly classified drivers as independent contractors.
Court Judge Elizabeth Allen White held that a federal law protecting motor carriers from state regulation preempts claims against motor carriers brought under California's Unfair Competition Law.
The federal law, part of the Federal Aviation Administration Authorization Act, prohibits states from enacting and enforcing laws that are "related to" motor carrier prices, routes, or services in order to maximize competitive forces in the trucking industry. Judge White agreed with the "very strong" argument advanced by attorneys Neil S. Lerner, Arun Dayalan, and Arthur A. Severance of the Sands Lerner law firm that claims against motor carriers under the UCL are preempted under the FAAAA.
Judge White held that the attorney general's case, which was based on the allegation that the defendants had improperly classified drivers as independent contractors rather than employees, would have a significant effect on motor carrier prices, routes, and services and was therefore preempted under the FAAAA. Judge White found that the attorney general's actions threatened to erect entry controls that would discourage independent contractor drivers from participating in the trucking market, thereby frustrating Congress' intent to maximize competitive forces in the trucking industry.
The Teamsters union and other labor interests have been trying for some time to get the port truckers classified as employees rather than as independent contractors so they can be organized by the union. (There are laws prohibiting unions from organizing independent contractors.)
One of the tactics that has been attempted is the Port of Los Angeles banning the use of independent contractors as part of its Clean Trucks Program. (The rationale is that owner-operators are too poor to afford lower-emissions trucks.) The American Trucking Associations is challenging that in court, and cited the FAAA as part of its challenge. A U.S. District Court judge in Los Angeles this summer issued a preliminary injunction prohibiting the port from enforcing the owner-operator ban.