News alert: the court of appeal rejects the request for reconsideration of the AB5 decision
A ruling by a federal appeals court on Monday could allow California to begin enforcing its independent contractors law in the trucking industry within a week.
In a 2-1 decision, the US Court of Appeals for the 9th Circuit dismissed a motion filed last month by the California Trucking Association (CTA) for a new bench hearing of the April court decision which removed the lower court injunction exempting the trucking industry. of the law on independent contractors known as AB5. The injunction had been in effect since January 2020.
In dismissing CTA’s request, the appeals court said the group’s petition “has been distributed to the judges of the court, and no judge has requested a vote for bench review.”
As previously reported by FreightWaves, a seven-day clock formalizing the decision made by the appeals court in April that lifted the injunction begins when a rejection of the bench decision is made. However, if the CTA decides to appeal to the United States Supreme Court, it is possible that the lifting of the injunction will be stayed while the High Court decides whether or not to take the CTA case.
CTA was not immediately available to comment on the next moves.
The part of AB5 that’s problematic is what’s called pin B. Under this provision, a worker who is hired to perform a function that is at the heart of what the company does – such as a trucking company who hires an independent owner-operator of a truck – should be considered an employee. A trucking company that hires an outside accountant, for example, would not fall under Stream B.
In granting the injunction, the district court in early 2020 accepted the CTA’s argument that AB5 was in conflict with the Federal Aviation Administration Authorization Act, a 1994 statute that the CTA said blocked AB5 because of its potential impact on âfares, routes and services. “
The American Trucking Associations, the Western States Trucking Association and the Owner-Operator Independent Drivers Association (OOIDA) all filed briefs with the court in support of CTA’s request for a rehearing. Their arguments boiled down to the same basic legal logic: that AB5 is a state law that affects prices, routes and services, which the Federal Aviation Authorization Administration Act of 1994 specifically said was not. not permitted and would conflict with Federal rule.
OOIDA further stated that AB5 “eliminates a whole class of motor carriers that depend on independent owner-operators to do business and, therefore, reverses the intention of Congress to allow the market to dictate how Motor carriers provide trucking services, in order to preserve and strengthen the independent owner-operator driver’s business model, and to anticipate such pervasive state regulation. “
OOIDA also warned that, since so much of trucking in the United States depends on business to and from California, “the impact of AB 5 would have an immediate negative effect and major impact on a large part of the country’s economy “.
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