A California Court of Appeal last month ruled the Federal Aviation Administration Authorization Act, or FAAAA, does not preempt California’s ABC test for independent contractor classification, which was established in the 2018 state Supreme Court Dynamex ruling and codified into law as state law AB 5, The National Law Review reports.
The ruling overturned a lower court’s finding in January, in which state court a held that “because Prong B of [California’s] ABC test … prohibits motor carriers from using independent contractors to provide transportation services, the ABC test has an impermissible effect on motor carriers’ ‘price[s], route[s], [and] service[s]’ and is preempted by the FAAAA.” The appeals court, however, reasoned that the “ABC test is a law of general application,” and “does not mandate the use of employees for any business or hiring entity.”
Some trucking businesses are expected to appeal the case to the state Supreme Court.
Separately, a federal judge in January had granted the California Trucking Association an injunction to prevent the application of AB 5 against independent contractor truckers.
The Court of Appeal likely will not have the last word on this issue. At least some of the trucking businesses involved in the case reportedly plan to seek review from the California Supreme Court. That ruling is under appeal with the Ninth Circuit and could ultimately reach the US Supreme Court.