California Judge Exempts Truckers from AB5 Contractor Law

A state court judge in California on Wednesday ruled in favor of truckers seeking a legal exemption from Assembly Bill 5 (AB5) which broadly restricted the use of contractors by requiring employers to reclassify them as employees entitled to various benefits.

This comes a little more than a week after a separate, similar ruling, where a federal court judge issued a restraining order temporarily exempting 70,000 truck drivers from the Jan. 1 implementation of AB5, after a legal challenge from a trucking group. On Jan. 13 the judge extended the temporary injunction, according to FreightWaves.

In the current instance, Los Angeles County Superior Court Judge William Highberger ruled that AB5 is preempted by the Federal Aviation Administration Authorization Act of 1994, because it would ban motor carriers “from using independent contractors to provide transportation services,” Bloomberg Law reported.

AB5, which took effect Jan. 1, was built on the California Supreme Court’s 2018 ruling in Dynamex West Operation vs. California Superior Court. That decision established an “ABC test” of three criteria under which employers could classify workers as contractors instead of employees entitled to minimum wages, overtime, and other benefits.

Wednesday’s ruling came two years to the day after the Los Angeles city attorney’s office filed suit against NFI Industries and subsidiaries, Cal Cartage Transportation Express, CMI Transportation and K&R Transportation California, alleging misclassification of truck drivers in violation of the state’s Unfair Competition Law.

Based on the new ruling, the 2018 lawsuit will proceed using a previous, less strict standard for determining worker classification.