Truckers will injunction of California’s gig worker law

A federal judge granted California motor carriers a preliminary injunction enjoining Assembly Bill 5, the controversial new law that presumes workers are employees unless they meet the standards of a three-prong "ABC" test.

In an order filed Thursday, U.S. District Judge Roger T. Benitez of San Diego ordered the injunction barring enforcement of the law on motor carriers, including trucking companies and independent owner-operator truck drivers, many of whom contract with carriers to transport goods in and out of the state.

The order extends the enjoinment for truck drivers Benitez granted to the plaintiff, the Sacramento-based California Trucking Association, hours before the law went into effect Jan. 1. California Trucking Association v. Becerra, 18-CV02458 (S.D. Cal., filed Oct. 25, 2018).

With the injunction, independent truckers are free from the law "pending a final judgment in this action," Benitez wrote. "Plaintiffs have satisfied the imminent injury requirement where, assuming their interpretation of AB-5 is correct, they face the choice of either implementing significant, costly compliance measures or risking criminal and civil prosecution."

"With its decision, the U.S. Southern District Court validates our claim that the implementation of the new classification test could have been detrimental to the long-standing and historical place owner-operators have had in the transportation industry," plaintiff's attorney Robert R. Roginson of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.'s Los Angeles office said in a statement.

"Our office has and will continue to defend laws that are designed to protect workers and ensure fair labor and business practices," the attorney general's office said in an email Friday. "We're reviewing the decision."

The injunction comes days after Benitez heard arguments last Monday from Roginson and Deputy Attorney General Jose A. Zelidon-Zepeda. There, Roginson argued independent truck drivers are exempt from AB 5 because the Federal Aviation Administration Authorization Act of 1994 preempts the state law.

The federal law prohibits states from enacting or enforcing any law, regulation or any other provisions that could affect the price, route or service of any motor carrier "with respect to the transportation of property," an argument Benitez agreed with, citing the 9th U.S. Circuit Court of Appeal's decision in American Trucking Association, Inc. v. City of Los Angeles, 559 F. 3d 1046, 1053 (9th Cir. 2009).

"As the Ninth Circuit has explained, '[t]here can be no doubt that when Congress adopted the FAAA Act, it intended to broadly preempt state laws that were 'related to a price, route or service' of a motor carrier,'" Benitez wrote.

Benitez also noted FAAAA exemption in California Trucking Association v. Su, a similar case in which the group challenged the state's assertion independent truckers were employees under the previous standard set in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3rd 341 (1989). In that case, the 9th Circuit agreed the FAAAA doesn't preempt Borello because the state test does not "compel a motor carrier to use employees for certain services." California Trucking Association v. Su, 2018 DJDAR 9063.

However, Prong B of AB 5's "ABC" test forces that compulsion by presuming independent drivers are employees because their work is not "outside the usual course of the company's business," thus triggering the preemption, Benitez wrote.

"Under the 'ABC' test, a worker providing a service within an employer's usual course of business will never be considered an independent contractor," Benitez wrote.

While an actual trial will determine final judgment, the arguments, coupled with Los Angeles County Superior Court Judge William F. Highberger's decision in California v. Cal Cartage Transportation Express, LLC, BC689320 (L.A. Super. Ct., filed Jan 8, 2018), spurred Benitez to openly question whether the state overreached in drafting AB 5.

"Plaintiffs have raised serious merits," the federal judge wrote. "There is little question that the State of California has encroached on Congress' territory by eliminating motor carriers' choice to use independent contractor drivers, a choice at the very heart of interstate trucking."

"With AB 5, California runs off the road and into the preemption ditch of the FAAAA," Benitez concluded.