California Superior Court Rules That AB 5 is Preempted by Federal Law as Applied to Independent Owner Operators
On January 8, 2020, Los Angeles County Superior Court Judge William Highberger issued an opinion concluding that the Dynamex “ABC Test” set forth in Dynamex Operations West v. Superior Court (2018) 4 Cal. 5th 903 as enacted by the California legislature in AB 5 runs “afoul of Congress’s 1994 determination in the Federal Aviation Administration Authorization Act (the “FAAAA”), 49 U.S.C. § 14501(c)(1) that a uniform rule endorsing use of non-employee independent contractors (commonly known in the trucking industry as ‘owner-operators’) should apply in all 50 states to increase competition and reduce the cost of trucking services.”
The Superior Court held that prong B of the ABC Test would prohibit motor carriers from using independent contractors, that no relevant exclusions in AB 5 are applicable, and that the prohibition on independent contractors has sufficient direct or indirect effects on motor carrier prices, routes, and services, and is therefore preempted by the FAAAA. The ruling means that the flexible Borello Test, the predecessor to the ABC Test, would apply to determine truck driver contractor status.
Judge Highberger noted the December 31, 2019 ruling in the Southern District Court in California Trucking Ass’n v. Becerra, granting a Temporary Restraining Order against the State’s representatives prohibiting enforcement of AB 5. A hearing is set for January 13 in California Trucking Ass’n v. Becerra to consider a longer stay in the enforcement of AB 5.
This is another win for the trucking industry in the dynamic legal battle playing out in California.
Taylor and Associates is a full-service transportation law firm assisting clients to meet their federal and state compliance requirements. If you have questions about the FMCSA Drug and Alcohol Clearinghouse, or about your company’s compliance with FMCSA’s regulations, including driver education, consent forms, or owner-operator compliance, contact us.
Contributing Author: Lesley Sachs