The Western States Trucking Association filed a lawsuit in federal court challenging a construction-trucking-specific provision of California’s already controversial Assembly Bill 5, which severely restricts the use of independent contractors in the state.
AB 5, signed by Gov. Newsom in September and effective Jan. 1, 2020, dramatically affects all workers that have independent contractor status, “upending the market for owner-operator trucking companies by imposing massive liability upon those that contract with them,” according to a WSTA press release. But the group says it’s even worse news for the construction sector.
For most workers, AB 5 codified the California Supreme Court’s stringent ABC test from its 2018 Dynamex decision. It requires companies wishing to use independent contractors to meet all three requirements. At issue is the “B” prong of the test: That the worker performs work that is outside the usual course of the hiring entity’s business.
WSTA said that for motor carriers that provide “construction trucking services,” AB 5 included no test whatsoever. “Rather, it mandates that workers are employees rather than independent contractors. This mandate is clearly preempted by federal law, which prohibits states from enacting or enforcing any law or regulation related to the price, route, or service of a motor carrier,” the association explains in a press release.
WSTA was the first to file a lawsuit on behalf of the trucking industry when it challenged the original Dynamex decision back in 2018. When it became clear to WSTA during negotiations with the Legislature and stakeholders that AB 5 would be passed at the Capitol in a way that would render WSTA’s original Dynamex lawsuit moot and thus likely unsuccessful, it voluntarily dismissed its case on Sept. 4, 2019.
“However, with the subsequent inclusion of the offensive construction trucking provision in AB 5, WSTA determined that it was now appropriate and necessary to refile a lawsuit specifically targeting AB 5’s construction trucking provision in order to best protect its construction trucking members,” the release explained.
WSTA is not the only trucking group that has challenged the law in court. The California Trucking Association and two California-based owner-operators filed a challenge to the law in November.
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.)
WSTA said it applauds the efforts of the California Trucking Association and others who are also challenging AB 5 in court.
“In its lawsuit, CTA has taken a broad approach and is challenging the ABC test itself as it applies to all motor carriers. Alternatively, WSTA’s lawsuit is narrowly focused on AB 5’s construction trucking provision in Labor Code section 2750.3, subdivision (f)(8), which does not utilize the ABC test. Given the unpredictability of the judicial system, it is possible that a judge could rule narrowly in the CTA case in a manner that does not provide adequate relief for construction trucking companies. As such, WSTA has filed this complementary case to ensure that its members are protected in each scenario.”
You can read WSTA's legal challenge on the association's website.