Why The California Trucking Association Is Appealing the AB 5 Ruling

After a three-judge panel of the 9th Circuit Court of Appeals rejected a lower court’s preliminary injunction that halted the implementation of AB 5, a new law reclassifying independent contractors as employees, California Trucking Association CEO Shawn Yadon issued a statement saying CTA will seek an “en banc” review by the full appellate court. 

CTA claims the state law “will make it impossible to continue with the independent operator model in the state,” according to Transport Topics.

The three-judge appellate panel said the law is a “generally applicable labor law that affects a motor carrier’s relationship with its workforce and does not bind, compel or otherwise freeze into place the prices, routes or services of motor carriers, and is not pre-empted by the Federal Aviation Administration Authorization Act.” The panel claimed the lower district court abused its power by hindering the state of California from enforcing the law against motor carriers doing business in California. 

Opponents of the latest rule argue the state law is in fact pre-empted by the Federal Aviation Administration Act of 1994, which, “expressly pre-empts state laws related to a price, route or service of any motor carrier,” according to CTA.

Once the appeal is filed, the 29 judges in the 9th Circuit would vote on whether or not they will rehear the case. If a majority agrees to review the panel’s decision, a clerk will assign 11 judges to the case. If the full appellate court agrees to review the case, the lower court’s ruling will remain in effect until a final decision is made on the case.

Some legal analysts believe the fight over AB 5 could continue in the appellate courts for as long as two years. If the case reaches the U.S. Supreme Court, there is a high chance the case will be ruled in CTA’s favor.

Motor carriers have a problem with the second component of the three-pronged “ABC test”. The second component states an independent contractor must be a worker who performs work outside the usual course of the hiring entity’s business.

The lawsuit claims that motor carriers rely on independent contractors to meet the fluctuating demand for highly specialized services.

CTA CEO Yadon said, “The California Trucking Association will take any and all legal steps necessary to continue this fight on behalf of independent owner-operators and motor carriers operating in California.”