The injunction that bars California’s AB5 independent contractor law from being implemented in the state’s trucking sector will remain in place for now — and perhaps for the next several months.
That was assured Monday morning when the U.S. Supreme Court went silent on the issue when it released its “orders,” the long list of cases that it mostly denies certiorari of lower court appeals but accepts a small fraction.
Monday’s surprise was that the California Trucking Association v. Bonta, the organization’s lawsuit against the state over AB5, was nowhere to be found on the list. It wasn’t on the accepted list, it wasn’t on the denial list. Attorneys in the trucking industry were expecting some sort of resolution Monday, given that the case was on the agenda for a court conference last Thursday.
“We’re scratching our heads,” said Marc Blubaugh, co-chair of the transportation practice at the Benesch law firm. Blubaugh filed an amicus brief on behalf of the Intermodal Association of North America and the Transportation Intermediaries Association.
AB5 is the California law that defines independent contractor status in the state, using the ABC test. That test is viewed as more likely to define a worker as an employee rather than an independent contractor.
For trucking, the B prong of the ABC test is particularly problematic. The B prong says a worker can be an independent contractor if he or she “performs work that is outside the usual course of the hiring entity’s business.” An independent owner-operator hauling freight for a trucking company faces the probability that in litigation, that activity would be found in violation of the B prong.
An injunction handed down by a lower court in early January 2020, when the law went into effect, kept AB5 from being implemented in trucking because of a possible conflict with the Federal Aviation Administration Authorization Act, the so-called F4A. But an appeals court overturned that decision in April 2021, and the CTA requested the Supreme Court grant review.
Whether it is going to get that review now must wait for an indeterminate amount of time. Blubaugh suggested a decision on certiorari could be issued later this week but added that was not likely.
Both Blubaugh and Greg Feary, a partner with the Scopelitis law firm, said it is also possible that the case may not be taken up by the Supreme Court again until its October conference, when it decides what cases to take and what to reject in the new term that begins that month. Feary added that the court last year held a July conference, though it is not certain it will do so again this year.
Watch now: More on what AB5 may mean for trucking
Blubaugh said the omission of CTA v. Bonta on the list could mean that “maybe cert is unfortunately going to be denied, but there is dissent on the court and they want some time to discuss it further.”
If certiorari is denied, AB5 goes into effect immediately in California trucking. It already is in effect for other industries, though its fate with gig drivers, such as those with Uber and Lyft, remains in legal limbo for now.
One development that the trucking industry might find worrisome: The court declined certiorari on a case involving the question of state preemption of the F4A that had C.H. Robinson (NASDAQ: CHRW) as a plaintiff.
The case involving the brokerage company did feature the issue of F4A preemption. But it also involved safety, rather than worker classification, and both Blubaugh and Feary said court acceptance of certiorari in the C.H. Robinson case was generally not expected.