The California Trucking Association and two California-based owner-operators filed a lawsuit against the "ABC" employment test mandated by California’s recently passed independent contractor law, which the group says threatens the livelihood of independent truck drivers.
The CTA filed an amended complaint with the U.S. Southern District Court seeking declaratory and injunctive relief against the employment test that was codified in Assembly Bill 5.
AB 5’s purpose is to prevent businesses from classifying workers as independent contractors who are, in practice, only working for one company. Proponents of the law claim that these workers are being denied the wages and benefits that would be guaranteed to them if they were properly classified as employees.
The law was originally aimed at workers for ride-sharing companies like Uber and Lyft, as well as at some trucking companies that have been accused of misclassifying drivers. However, the line between an employee and an independent contractor is fuzzy, so included in the law was an ABC test to clarify under which circumstances workers need to be considered employees.
Which brings us back to the CTA’s lawsuit. With owner-operators making up a sizable chunk of the trucking workforce, and the ABC test potentially preventing drivers who have always considered themselves as independent entities from remaining so, CTA says the bill wrongfully restricts their ability to work.
“AB 5 threatens the livelihood of more than 70,000 independent truckers,” said CTA CEO Shawn Yadon. “The bill wrongfully restricts their ability to provide services as owner-operators and, therefore, runs afoul of federal law.”
CTA's suit argues that the classification test codified by AB 5 is preempted by the supremacy and commerce clauses in the U.S. Constitution and is in direct conflict with the Federal Motor Carrier Safety Act and the Federal Aviation Administration Authorization Act of 1994. (Part of the FAAAA bans states from enacting laws that affected a motor carrier's prices, routes and services.)
The CTA says the test would force owner-operators in California to abandon thousands of dollars of investments in their equipment and cost drivers the right to be self-employed. The group says the AB 5’s one-size-fits-all testing method has highly restrictive criteria and is riddled with carve-outs and exemptions for specific businesses and industries.
“Independent truckers are typically experienced drivers who have previously worked as employees and have, by choice, struck out on their own." Yadon says. "We should not deprive them of that choice. Some of the country’s most successful trucking companies were started by entrepreneurial independent truckers. We can protect workers from misclassification without infringing upon independent truckers’ right to make a living in California.”
A representative from the Brotherhood of Teamsters Union, a group that has been actively fighting the related issue of driver misclassification at the ports of Southern California, blasted the CTA's suit. The move to block implementation of AB 5 was, “presumably to allow California trucking companies to continue to violate multiple state and federal laws that define 'employee' vs. 'independent contractor," said Fred Potter, vice president-at-large of the Teamsters and director of the Teamsters’ Port Division, in a statement.
“It’s no surprise that their trucking contractors are going to court to perpetuate a scheme – deemed illegal by multiple regulatory agencies and courts long before Assembly Bill 5 was introduced in the California Legislature – that has robbed the typical driver of tens of thousands of dollars a year due to their misclassification as independent contractors," Potter said. "The gig is up, and it’s time for the drayage industry to comply with local, state, and federal laws or risk being kicked out of the ports altogether, and it’s time for the cargo owners – America’s largest retailers – to stop doing business with recidivist lawbreakers."