A federal appeals court in San Francisco on April 28 ruled that truck drivers in California should be classified as employees rather than independent contractors, overturning an injunction that stopped the trucking industry from coming under Assembly Bill 5, California’s get-tough law on independent contractor misclassification.
The California Trucking Association and two California independent owner-operator truck drivers first filed the lawsuit in 2019, arguing that the “ABC” classification test set forth in the Dynamex Operations West Inc. v. Superior Court decision, and codified by AB 5, violates federal law because it is preempted by the supremacy and commerce clauses in the US Constitution and is in direct conflict with the Federal Motor Carrier Safety Act and the Federal Aviation Administration Authorization Act of 1994 (F4A).
However, last week’s ruling by the Ninth US Circuit Court of Appeals held the application of AB 5 to motor carriers is not preempted by the F4A.
“Because AB 5 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, we conclude that it is not preempted by the F4A,” Circuit Judge Sandra Ikuta wrote in the opinion.
Dissenting Circuit Judge Mark J. Bennett wrote that AB 5 both affects motor carriers’ relationship with their workers and significantly impacts the services motor carriers are able to provide to their customers, and it therefore is preempted as applied to California Trucking Association’s members.
The California Trucking Association said it would take “whatever legal steps are necessary to continue this fight on behalf of independent owner-operators and motor carriers operating in California,” AP reported. The case could wind up before the US Supreme Court, especially because the 1st US Circuit Court of Appeals in Boston ruled in 2016 that a similar Massachusetts law did conflict with federal law.
Labor Secretary: Most gig workers are employees
Separately, US Labor Secretary Marty Walsh, appointed to his role March 21, recently spoke out in support of classifying gig workers as employees. Walsh’s work at the Department of Labor is expected to have a major impact on US workplace laws and regulations, including vigorous enforcement of occupational safety and health rules, overtime payments and proper administration of employee benefit plans.
“We are looking at it but in a lot of cases gig workers should be classified as employees… in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,” Walsh told Reuters in an April 29 interview, expressing his view on the topic for the first time.
“These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that’s what we are about in America. But we also want to make sure that success trickles down to the worker,” he said.