Update: California Judge on AB5 Rules Against Trucking Industry

California’s AB5 legal battles, that cover an estimated 70,000 owner-operators, lose another chance to block the rule.

The AB5 law makes it more difficult for companies to classify people who work for them as independent contractors with the new ABC test.

In April 2021, the first injunction to fight the law from affecting the trucking industry was overturned by an appellate court.

On Friday, California District Judge Roger Benitez denied the California Trucking Association’s and Owner-Operator Independent Drivers Association’s latest request for injunction.

This means there will be no relief to truckers from AB5 as OOIDA and CTA appeal the ruling.

What did the California judge decide?

According to the judge, the original preliminary injunction, “was entered based upon the preliminary conclusion that AB5 was preempted by the Federal Aviation Administration Authorization Act.”

The state of California, along with the International Brotherhood of Teamsters, appealed the ruling, and the Court of Appeals reversed the injunction, finding that AB5 was not preempted by the F4A. CTA and OOIDA then filed renewed motions for a preliminary injunction.

In the renewed claims, CTA and OOIDA re-alleged that:

1. F4A preempted AB5,
2. There is implied preemption of AB5,
3. AB5 is a violation of the Dormant Commerce Clause of the U.S. Constitution, and
4. AB5 violates the Equal Protection Clause of the Constitution “by creating irrational or animus-based classifications.

On the first claim, Benitez noted the ruling was resolved earlier in this case as the courts found that AB5 “is not significantly related to rates, routes, or services,” and therefore isn’t preempted by the F4A.

On the second claim, Benitez said California’s law doesn’t make it “impossible for truck drivers to comply with both federal and state law because there is simply no federal standard of classification requiring compliance. The [F4A] does not dictate that truck drivers must be classified as independent contractors or that drivers are not subject to state wage and hour laws.”

On the third claim, Benitez said CTA and OOIDA aren’t arguing that AB5 was designed to discriminate in favor of in-state workers and against out-of-state workers, but rather that it is the “effect of AB 5 that offends the Dormant Commerce Clause.” Benitez concluded that “AB 5 does not offend the core constitutional principle of prohibiting purposeful discrimination against interstate commerce. … And while AB5 has economic effects, the effects do not confirm purposeful discrimination against interstate commerce in the design of AB5.”

Lastly, on the fourth claim, Benitez said “the statements of a single legislator do not necessarily represent the reasons motivating other legislators who vote to pass a bill into law.”

Benitez concluded that “if sufficient political or economic pressure can be brought to bear by Plaintiffs and their supporters, the more onerous provisions of the statute can be amended. The courts, on the other hand, are not the proper bodies for imposing legislative amendments.”

CNS can help fleets with our new driver hire program

If AB5 does not include a trucking exemption, then there will be a flood of independent carriers going through a new hire process. There are a lot of rules around the hiring process, not limited to drug testing, CDL Clearinghouse queries, compliant DQ file process, and more.

To get these drivers on the road fast, Compliance Navigation Specialists has developed a new hire program that will streamline your hiring process.

Our New Hire service includes the following:

• Tailor Drive Qualification file (paper) or Online Tailored Driver Qualification File (Paperless)
• Initial Audit
• Previous employer inquires completed on your behalf
• Initial Motor Vehicle Report (MVR)
• Pre-Screening program report (PSP)
• Online Record Retention
• Pre-employment drug screening verification
• Doctor on medical card verification
• FMCSA clearinghouse full query
• Driver Qualification
• New Hire phone support
• and more

Accuracy, organization and diligence are crucial to keeping your files in order and ready for an audit at a moment’s notice. Our DQF Management System is completely customizable to your individual needs. The consultants at CNS stay in communication with you regarding document updating, as well as offering comprehensive reports upon request, and reports of routine audits by our own DQF Auditors.

Our driver management and new hire management services will exceed your expectations. You focus on trucking, and let us focus on your driver file management. If you have a fleet of drivers, we assure you that you can’t do this cheaper in-house.

Eliminate the administration cost and have Compliance Navigation Specialists manage your files.

We will ensure that your information is collected, current, and complete. In addition, we will continue to update your files as required, and let you know when an updated piece of information is needed.