The U.S. Supreme Court has declined to hear the California Trucking Association’s petition in the case regarding California’s Assembly Bill 5 independent contractor law. The decision could force California’s 70,000 independent truck owner-operators to stop driving in the state, which is already suffering from supply-chain backlogs.
AB 5, the 2019 state law authored by Democrat Assemblywoman Lorena Gonzalez, completely redefined independent contractors in California, as well as greatly reducing the number of contractors in the state by creating an “ABC test” that instead made them employees, or put them out of work.
AB 5 was passed by Democrats in the California Legislature and signed into law in 2019 by Gov. Gavin Newsom.
The stated intent of AB 5 was to force “Gig Economy” rideshare companies to reclassify their drivers as employees, rather than allowing them to work as independent contractors, which would destroy the company’s very business model, and make the drivers susceptible to unionization.
AB5 didn’t just target California’s “gig economy;” it outlawed all independent contractors with few exceptions – including independent truckers.
Gov. Gavin Newsom was supportive of the takeover of independent contractors. In an op ed, Newsom said, “Reversing the trend of misclassification is a necessary and important step to improve the lives of working people. That’s why, this Labor Day, I am proud to be supporting Assembly Bill 5, which extends critical labor protections to more workers by curbing misclassification.”
Truckers sued right away, and in January 2021, they won in state court: The Superior Court of California in Los Angeles ruled that independent truckers were exempted from AB 5. The court found that the law violated the 1994 Federal Aviation Administration Authorization Act (FAAAA), effectively giving independent truckers the right to operate in every state to (1) make uniform federal laws possible for easy interstate commerce, and (2) to create fair competition, the Globe reported.
The California Attorney General promptly appealed the decision, and the 9th U.S. Circuit Court of Appeals ruled 2-1 in April 2021 that truckers would no longer be exempt from the state’s AB 5 worker classification law, forcing many to become employees rather than independent contractors.
In May 2021, the California Trucking Association requested a rehearing over the Appellate Court ruling.
By August 2021 the California Trucking Association filed a petition with the U.S. Supreme Court to go over California’s AB 5 contractor law and argue that they should remain exempt due to federal protections. At issue: Whether the Federal Aviation Administration Authorization Act preempts the application to motor carriers of a state worker-classification law that effectively precludes motor carriers from using independent owner-operators to provide trucking services, the SCOTUS Blog reported.
But, it appears once again that the United States Supreme Court is refusing to clean up messes made by states. The court refused to hear the case, rendering the 9th Circuit Court decision effective.
“Gasoline has been poured on the fire that is our ongoing supply-chain crisis,” the California Trucking Association said in a statement following the Supreme Court’s decision to deny a judicial review of a decision of a lower court, a process known as certiorari, Bloomberg reported.
“In addition to the direct impact on California’s 70,000 owner-operators who have seven days to cease long-standing independent businesses, the impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs and worsening runaway inflation,” the CTA said.
The CTA is right, and they have been all along. However, this is a crisis created by the California Legislature and Governor, and can and should be reversed by the Legislature and Governor.
The problem with AB 5 is that the bill was based on the legally flawed California Supreme Court Dynamex decision.
In 2018, the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles dealt a blow to independent contractors. The Court ruled that the Dynamex delivery drivers were employees, rejecting its own prior test for determining whether workers should be classified as either employees or independent contractors,” Forbes reported.
According to many legal analysts, what the Court did was legislate from the bench by adopting a new rule for the narrow purpose of interpreting California’s Industrial Welfare Commission’s wage orders.
This is a legal mess made by the State of California, its lawmakers, and State Supreme Court. The U.S. Supreme Court is right by bouncing the case right back to the state to live with or solve, as it has done recently with Roe v. Wade, and even with Biden v. Texas.