The Roemer Report: July 2021

Truckers to take California AB5 independence fight to the Supreme Court

Thanks to a federal judge, a legal bout of epic proportions is going into later rounds as California truckers continue the fight for independence this Fourth of July. According to an announcement from the law firm Scopelitis, Garvin, Light, Hanson & Feary, Heavy Duty Trucking reported that the United States Court of Appeals for the Ninth Circuit granted the California Trucking Association’s (CTA) request for a stay of Assembly Bill 5 (AB5) mandate which suspends enforcement and provides the time for CTA to petition the United States Supreme Court.

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Seeking review and relief

CTA is seeking the review of the appellate court’s ruling (CTA v. Bonta) whether or not the restrictive “ABC” employment test required by AB5 is preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAA). CTA has challenged AB5 on the grounds that the law is pre-empted by the supremacy and commerce clauses of the U.S. Constitution and also is in direct conflict with the Federal Motor Carrier Safety Act and the Federal Aviation Administration Authorization Act of 1994. A critical legal precedent relative to this case, because the FAAAA bans states from enacting laws that affect a motor carrier's prices, routes and services. CTA (and their legal team) is asserting AB5 does exactly that and therefore cannot stand.

AB5, effective on January 1, 2020, codified a previous California Supreme Court decision into state law setting forth an “ABC” test to determine if a worker is an employee or an independent contractor. The ABC test defines a worker is an employee, unless it is certified that:

A) The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact

B) The worker performs work that is outside the usual course of the hiring entity’s business; and

C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed

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Low-blow from the left

The “B prong,” as it’s been dubbed, is the “sticking point” for trucking. Notes Heavy Duty Trucking: “It’s hard to argue that delivering freight is ‘outside the usual course’ of a motor carrier’s business.”

The CTA, representing motor carriers that hire independent owner-operator contractors with their own vehicles to transport goods and services throughout the state—sued the state’s attorney general, seeking to enjoin enforcement of the statute. Together with two independent owner-operators, the CTA argued that the Federal Aviation Administration Authorization Act (FAAAA) does indeed pre-empt application of the state law to motor carriers.

In overturning that decision last year, the appellate court’s 2-1 decision found that AB5 doesn’t conflict with federal law because it is “a generally applicable labor law that affects a motor carrier’s relationship with its workforce and does not bind, compel, or otherwise freeze into place the prices, routes, or services.” That CTA says is a demonstrably false assertion and partly the reason a preliminary injunction against enforcement of AB5 was granted by a federal court judge in late June.

Putting AB5 to the supreme test

Upon the most recent ruling the state immediately appealed of course. Nevertheless, the existing injunction put in place a stay against enforcement of AB5 against motor carriers which will remain in place pending the Supreme Court’s disposition of CTA’s expected petition.

Only the few get heard

Because the Supreme Court only reviews a small percentage of cases, the Ninth Circuit’s stay suggests agreement that the case fits within the criteria for cases to be heard by the Supreme Court. CTA’s plans to petition the U.S. Supreme Court to consider its case against the state’s new worker classification law which it announced June 21, came the same day the United States Court of Appeals for the Ninth Circuit denied CTA’s request for an en banc rehearing of a case brought against the law.

Ninth’s stay the real victory

After the law was upheld in the lower court last year, the International Brotherhood of Teamsters announced the ruling “a massive victory for California’s truck drivers, who for far too long have faced exploitation and misclassification at the hands of trucking companies that place corporate profit ahead of drivers’ safety and well-being.” What’s ironic is this exploited class doesn’t feel exploited or victimized and refuses to be “helped” by a corrupt (A top California Teamsters officer was indicted last year for racketeering) organization supporting the legislation. For California’s independent truckers the Ninth Circuit Court’s stay was the real victory but this skirmish only sets the stage for the final round.

Why they fight, again

Truckers and the CTA are also not buying what the so-called “progressive” politicians in California and elsewhere are claiming when they say they are protecting America’s workers. What they are really protecting is one-party status quo, and big labor corruption. The Teamsters and the AFL-CIO want to gain membership and control in the drayage sector working California ports. By the way, labor unions were by far the largest contributors to Lorena Gonzalez, the legislator who wrote AB5, donating about a $500,000 dollars to her 2018 campaign.

Hopefully with the law, some luck, and a somewhat conservative SCOTUS we’ll see California’s independent owner operators achieve true independence by the next Fourth of July from an overreaching law designed by one the bluest states in the union.

Bob Tales