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Trucking group asks SCOTUS to review Calif. classification law

3 minute read

A truck drives west towards California along highway 8 near Gila Bend, Arizona, United States, October 10, 2016. REUTERS/Mike Blake

  • 9th Circuit said state law not preempted by federal regulations
  • Trade group says ruling threatens successful independent contractor model

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(Reuters) - A trucking industry group has moved for review by the U.S. Supreme Court of a decision tossing out its challenge to California's strict worker classification law, saying it is preempted by federal regulations governing trucking companies.

The California Trucking Association filed a petition for certiorari on Monday claiming the 9th U.S. Circuit Court of Appeals' April ruling upholding the law known as AB5 threatens the longstanding "owner-operator" model in which drivers who own their trucks work as independent contractors.

The CTA said AB5 is preempted by the Federal Aviation Administration Authorization Act (FAAAA), which also applies to the trucking industry and bars states from enacting laws that dictate the prices, routes and services offered by motor carriers.

"Congress used notably broad preemptive language in the FAAAA to avoid development of a patchwork of state service-determining laws, acting to ensure that trucking rates, routes, and services would reflect competitive market forces," the group said.

The CTA is represented by Mayer Brown and Ogletree Deakins Nash Smoak & Stewart.

The California attorney general's office and the International Brotherhood of Teamsters, which represents many truck drivers and intervened in the case to defend the state law, did not immediately respond to requests for comment.

AB5 codified a test created by the California Supreme Court in the 2018 case Dynamex Operations West Inc v. Superior Court. The three-pronged "ABC test" says workers are a company's employees if they are under its direct control, engaged in its usual course of business, or do not operate their own independent businesses.

The standard, which has been adopted by other states including Massachusetts and New Jersey, has been heavily criticized by business groups who say it makes it impossible for many companies to hire independent contractors.

The CTA in its lawsuit said AB5 will harm trucking companies by forcing them to purchase and maintain fleets of trucks and provide drivers with meal and rest breaks and other benefits afforded to employees.

U.S. District Judge Roger Benitez in January 2020 granted a preliminary injunction to the CTA, finding that AB5 would affect the services and prices offered by trucking companies and thus was preempted. A month later, Benitez declined to dismiss the CTA's preemption claim.

The state appealed and the 9th Circuit in April reversed in a 2-1 decision. Generally applicable laws may have some indirect effects on how companies operate, the court said, but fall well within states' powers to regulate employment relationships.

Circuit Judge Mark Bennett in dissent said that AB5's impact on trucking companies is so significant that it ultimately dictates the prices and services they can offer.

The CTA in Monday's petition told the Supreme Court that Bennett was correct. Because truck drivers by definition are engaged in trucking firms' usual course of business, AB5 precludes them from ever being classified as independent contractors, the group said.

The case is California Trucking Association v. Bonta, U.S. Supreme Court, number not available.

For the CTA: Charles Rothfeld of Mayer Brown; Robert Roginson of Ogletree Deakins Nash Smoak & Stewart

For the state: Jose Zelidon-Zepeda of the California Attorney General's office

Read more:

Calif. worker classification law applies to truck drivers - 9th Circuit

Judge won't toss Calif. trucking group's key claim in challenge to AB5

Trucking group wins injunction of California worker classification law

Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at daniel.wiessner@thomsonreuters.com.

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