TCA in the fight to save the IC model

While activity in Washington slows significantly this month due to the traditional August recess, the trucking industry’s work on important advocacy issues has not stopped. In particular, the industry is gearing up for oral arguments in the legal battle against California’s Assembly Bill 5 (AB5), the onerous state legislation which would broadly prohibit motor carriers from utilizing independent contractors (ICs).

As readers most likely know, the general goal of AB5 is to end the misclassification of employees as ICs by companies wishing to take advantage of these individuals by denying them access to the benefits to which full employees are entitled. This abuse may be widespread in other industries, which were the intended targets of the legislation, but trucking’s IC model has been incredibly successful in providing unique opportunities to individuals who want the freedom that comes with this type of work. As the Owner-Operator Independent Drivers Association (OOIDA) stated, “AB5 not only threatens the business models and balance sheets of large motor carriers, it will also result in irreparable harm to owner-operators and small-business motor carriers – businesses, including OOIDA members, that are a critical component of interstate commerce.”

The California Trucking Association (CTA) has actively pushed back against AB5 and has challenged the legality of the law as it applies to trucking. CTA’s lawsuit against the State of California argues that the law is preempted under the Federal Aviation Administration Authorization Act (F4A), which prohibits states from imposing substantive standards related to the price, route, or service of a motor carrier. The case currently rests with the United States Court of Appeals for the Ninth Circuit, which will hear oral arguments on September 1 regarding whether to uphold the injunction against AB5 as it applies to motor carriers. After the Ninth Circuit issues a ruling, the full case will return to district court for a decision.

TCA has many members which utilize the IC model in a manner which is positive for both the carrier and the owner-operator. Because our members operate in interstate commerce, this law significantly threatens the ability to efficiently transport goods into and out of California, which would have a tremendous impact on the rest of the country if it is allowed to be fully implemented. Particularly during the coronavirus pandemic, any law that impedes the movement of critical, life-sustaining goods across the country should be halted.