Watch Now

California wants court to overturn injunction blocking AB5 in trucking sector

The state of California has asked a federal court to lift the preliminary injunction against imposing AB5 on the California trucking business.

“The district court erred in concluding that Plaintiffs were likely to succeed on the merits of their preemption claim,” the state attorney general’s office said in the filing this week. 

The request to the Court of Appeals for the 9th Circuit is part of the appeal of the successful attempt by the California Trucking Association (CTA) to be granted an injunction against the imposition of AB5 against the trucking industry. It has argued that AB5 was preempted by the Federal Aviation Administration Authorization Act (FAAAA), a law that dates back to the ’90s.

AB5 is the law enacted in California last year that seeks to legislate when a worker is an employee and when it is fair to describe him or her as independent. The so-called B prong of AB5 and the Dynamex court case that inspired it can be interpreted to mean that a trucking company hiring an independent owner-operator must view that driver as an employee, as opposed to a trucking company hiring a cleaning company to maintain the company’s headquarters. Trucking would be the company’s primary business; maintaining offices is not. Hence, the difference.

According to the filing by the attorney general’s office, the FAAAA “preempts state and local regulation that has a significant effect on the prices, routes or services of motor carriers.” (Italics added.) That was the position of the CTA as well.

But in its request for an end to the injunction, the attorney general’s office says other precedents in federal district court for the 9th Circuit Court — where the CTA’s request was granted — hold that “AB5 and its ABC test are the type of generally applicable background labor regulation that this Court has consistently held is not preempted by the FAAAA.”

The state’s action takes aim at the “prices, routes and services” part of the finding in the preliminary injunction. Interpreting that trio of standards “should not be read ‘with an uncritical literalism,’” the state wrote, quoting an earlier decision on FAAAA preemption. It cited legal precedents that it said should be interpreted as meaning that state labor regulations are not preempted by the FAAAA, including a 2014 case in which the court held that the FAAAA doesn’t preempt California’s meal and rest break laws.

The brief filed by the state quoted from the decision in that case: “The sorts of laws that Congress considered when enacting the FAAAA included barriers to entry, tariffs, price regulations, and laws governing the types of commodities that a carrier could transport. Congress did not intend to preempt generally applicable state transportation, safety, welfare or business rules that do not otherwise regulate prices, routes, or services.”

The California argument says AB5 doesn’t specifically block the hiring of independent contractors. “The [CTA] did not cite any language in AB5 prohibiting the use of independent contractors or mandating the use of employees for any business or hiring entity,” the request to lift the injunction stated. Rather, AB5 just “codifies” the ABC test “and states a rebuttable presumption that a worker is an employee.”

(The wording in the state’s appeal of the injunction is starkly in contrast to that conclusion by the district court. After running through several precedents, the court in that case said those earlier cases demonstrate that the FAAAA “likely preempts ‘an all or nothing’ state law like AB-5 that categorically prevents motor carriers from exercising their freedom to choose between using independent contractors or employees.”)

If the argument is correct that AB5 doesn’t literally ban the hiring of independent contractors as drivers by a trucking company, the state’s argument comes back to the question of “prices, routes and services.”

The ABC test and the earlier standard used to determine the question of employee versus contractor, known as the Borello test, do not “define the rights or benefits that a motor carrier must provide its drivers,” the state argues. The decision to grant the injunction then “offers no substantive analysis on what impact labeling motor carriers’ drivers to be ‘employees’ will have on prices, routes and services,” the state argues.

The temporary injunction blocking AB5 came down on New Year’s Eve, a day before AB5 went into effect. (The highly controversial law remains in effect for a host of other California industries.) The injunction’s transition from temporary to preliminary came down several weeks later.

The state argues that what might be viewed as the last-minute nature of the CTA action is a reason to overturn the injunction. In essence, the argument the state makes is that if the imposition of AB5 was going to be so detrimental to their business, what took them so long? 

The state’s filing says the ABC test first became a reality for trucking companies with the Dynamex decision handed down in April 2018, but the request for the injunction came down on Dec. 2, 2019. “Nothing prevented plaintiffs from seeking injunctive relief during this period, particularly if they in fact faced irreparable harm absent such relief,” the state’s filing said.

The  International Brotherhood of Teamsters made the same request to have the preliminary injunction lifted.

One Comment

  1. Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! UNITE , CONQUER , & YOU'LL PROSPER ! IMHO

    I’ve stated in earlier comments in this situation that number 1 , the injunction should be easily overturned , and 2 , the F4A should be ratified to remove any ambiguity leading to it’s manipulated use against fairness towards employees such as in this case .

    Furthermore , the ambiguity in the F4A is tying up the courts with cases that could be prevented and weighs negatively on tax payers .

    The trucking industry has become a shameful industry and abuses their own liberty as well as abusively using the legal system to continue their abusive behavior . The trucking industry due to their associations and lobbying shenanigans have made a mockery out of the industry at the expense of public and driver safety to say the least .

    This industry has become a pathetic joke that costs tax payers enormously which could be prevented . Truckers in general are none the wiser . They remain divided rather than befriend one another , and they compete against one another rather than align themselves together to collectively prosper within the industry .

    This industry sucks due to the general mentalities of the population running it and involved in it . That’s the truth that cannot be denied .

    Look at what most truckers lament about . They lament about a lack of respect when they themselves generally lack self respect and lack respecting one another . CHANGE starts with the one in the mirror ! Until then , cry away on deaf or hypocritical ears ……..

    This industry is a virus that infects all that participate in it !

    Draw your own conclusion , I have certainly drawn mine .

    In my humble opinion ………

Comments are closed.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.