The U.S. Supreme Court has denied a petition from the California Trucking Association (CTA) that claimed California’s new worker classification law (AB5) threatens independent contractor status for owner-operator truck drivers.
The CTA said the Federal Aviation Administration Authorization Act (FAAAA), which bars states from enacting laws that dictate the prices, routes and services offered by motor carriers, protects drivers from AB5, Daniel Wiessner reported for Reuters.
The laws may have some indirect effect on how trucking companies operate, but they fall within states’ power, according to the 9th Circuit decision.
AB5 codified a test that 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,” Wiessner reported.
Business groups who have criticized the standard have said it makes it impossible for companies to hire independent contractors – like owner-operator truck drivers.
The CTA said in its lawsuit that AB5 will force carriers to purchase and maintain fleets of trucks and give independent drivers benefits afforded by all their employees. In its petition, the CTA said the law will subsequently dictate the prices and services trucking companies in California will offer.
In January 2020, a U.S. District Judge put the law on hold for trucking companies. But the state appealed, and the 9th Circuit in April reversed, saying the FAAAA was designed to protect motor carriers against laws that directly regulate how they operate, not the ones that raise costs.
