In April, the 9th Circuit panel held that the application of California Assembly Bill 5 (AB 5) to motor carriers is not preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA). The panel found the district court abused its discretion by granting the preliminary injunction. The panel concluded that 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.
The California Trucking Association (CTA) recently filed a petition for writ of certiorari with the Supreme Court. The petition requests the Supreme Court weigh in on whether the FAAAA preempts the application to motor carriers of a state worker-classification law that effectively precludes motor carriers from using independent owner-operators to provide trucking services.
CTA argues the question warrants review because the courts of appeal and state courts disagree about the preemption issue. Moreover, CTA argues the FAAAA was created to avoid a patchwork of state service-determining laws, acting to ensure that trucking rates, routes, and services would reflect competitive market forces. Finally, CTA argued that the application of AB 5 to owner-operators will “up-end the trucking industry’s longstanding business model” and “will destroy the uniformity necessary for the free flow of interstate commerce and the operation of nationwide business.”
The injunction imposed against enforcement of AB 5 pertaining to motor carriers will remain in place pending the Supreme Court’s decision on CTA’s petition.
Jackson Lewis continues to track developments pertaining to independent contractors and worker classification issues. If you have questions about the application of AB 5 or related issues, please contact a Jackson Lewis attorney to discuss.