Trucking companies using owner-operators in California can breathe a sigh of relief for now, as a judge has extended a temporary restraining order keeping officials from enforcing the onerous terms of its AB5 independent contractor law against motor carriers.
A Jan. 13 hearing on the California Trucking Association’s motion for a preliminary injunction in its legal case against the state’s controversial Assembly Bill 5 was “spirited,” according to one attendee.
U.S. District Judge Roger Benitez heard arguments under advisement but did not issue a decision. He has extended the temporary restraining order that was put in place Dec. 31, and it will be in effect until his ruling on the preliminary injunction. This could take days or a couple of weeks, according to a California Trucking Associations spokesperson.
Until a decision is delivered, the California Trucking Association has said it is not commenting on the case.
However, Joe Rajkovacz, director of governmental affairs and communications for the Western States Trucking Association, attended the hearing and shared this comment with HDT via email:
“It was a surprising two hours of spirited questioning from the bench of plaintiffs, Teamsters counsel and the California attorney general. [The judge’s] questioning of all parties was very indicative that he has serious constitutional issues with how AB 5 impacts goods movement nationally in violation of the commerce clause and F4A.”
The attorneys at transportation legal firm Scopelitis, Garvin, Light, Hanson & Feary agreed that the judge “seemed to be leaning in favor of granting a preliminary injunction that would enjoin the state from enforcing AB 5 as to any motor carrier operating in California pending resolution of the case by the District Court.”
The CTA and the ABC Test
The California Trucking Association in November had filed a lawsuit challenging Assembly Bill 5. The new law, which went into effect Jan. 1, put into place a stringent “ABC test” for determining the validity of independent contractor relationships. Because one of the requirements, the “B prong,” prohibited companies from using independent contractors unless the worker was performing work “outside the usual course of the hiring entity’s business.”
CTA contends in its lawsuit that 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, also called F4A, bans states from enacting laws that affected a motor carrier's prices, routes and services.)
On Dec. 24, CTA filed a motion for temporary restraining order, seeking to keep the state from enforcing AB5 as it relates any motor carrier operating in California, pending the court’s decision on a preliminary injunction. In the final hours of New Year’s Eve, Judge Bernitez issued a temporary restraining order preventing state officials from enforcing the law against motor carriers, writing in that Dec. 31 decision that the association had showed the case was “likely to succeed on the merits” and that the plaintiffs are “likely to suffer irreparable harm in the absence of relief.”
Battling the Bill
California Gov. Gavin’s proposed 2020 budget calls for $20 million in additional funding to enforce Assembly Bill 5, the governor announced Friday. But trucking isn’t the only industry battling the new law.
In December, the Western States Trucking Association filed a complementary suit targeting how AB5 treats motor carriers that provide “construction trucking services.” Freelance writers and photographers also filed suit in December, alleging that AB5 unconstitutionally restricts free speech and the media. Uber and Postmates filed suit alleging that AB5’s targeting of app-based workers and platforms violates the Equal Protection Clauses of the United States and California Constitutions.
And there are indications that it will be addressed in the next session of the legislature. Kevin Kiley, a California Legislator representing the 6th Assembly District, has said he will introduce legislation in 2020 to “restore the right to earn a living.” He is promoting a rally to repeal AB5. Jan. 28 at 10 a.m. Pacific Time on the north steps of the California state capitol.