WASHINGTON — The U.S. Supreme Court is asking the U.S. Solicitor General’s Office for its opinion on the California Trucking Association’s (CTA) arguments against California Assembly Bill 5 (AB5). The solicitor general of the United States is the fourth-highest-ranking official in the United States Department of Justice.
California adopted AB5 in 2019 to expand a 2018 ruling by the California Supreme Court that limits businesses from classifying certain workers as independent contractors. The bill sought to determine who was an actual employee of a company — in other words, a worker with access to the full range of benefits and rights.
The bill was originally directed toward the “gig” economy, such as Uber drivers, but found a home in the trucking industry.
In essence, when the bill was signed into law, it endangered the independent contractor business model for trucking companies in California.
“The decision by the U.S. Supreme Court to call for the view of the solicitor general validates the critical nature of reviewing AB5’s disruptive impact in the midst of a historic, global supply chain crisis,” CTA CEO Shawn Yadon said in a statement.
“Since the introduction of AB5, the California Trucking Association has worked to protect the more than 70,000 owner-operators in California who choose to work independently because of the freedom, flexibility and business grown potential that this model has afforded them for decades. These small-business truckers face irreparable damage should AB5 be enforced.”
In the 2018 ruling, the California Supreme Court’s established the ABC Test, which considers all workers to be employees unless a business can show that three things are established.
The test states that “(A) A worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; (B) A worker performs work that is outside the usual course of the hiring entity’s business; and C) A worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.”
When the CTA sued in 2019, the U.S. Southern District Court of California granted a preliminary injunction to stop the state from enforcing AB5 on motor carriers. The trucking group argues that AB5 violates the Federal Aviation Administration Authorization Act, which prevents states from enforcing a law or regulation related to a price, route or service of motor carriers.
On April 28, the U.S. Court of Appeals for the Ninth Circuit ruled 2-1 that California’s AB5 “is a generally applicable labor law” and called for the removal of the preliminary injunction.
Two months later, the Ninth Circuit denied CTA’s petition for a rehearing. The CTA then filed a petition to the U.S. Supreme Court. That petition allowed the injunction to continue until the case is either heard or rejected by the U.S. Supreme Court.
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