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The Ninth Circuit Court of Appeals has issued a long-awaited decision on the question of whether AB5, California’s strict independent contractor misclassification statute, may be applied to motor carriers, or whether the Federal Aviation Administration Authorization Act (FAAAA or F4A) preemption language precludes such application.
In a blow to motor carriers statewide, the Court reversed the previously ordered injunction against the application of AB5 to California’s motor carriers, holding that AB5 is not preempted under the FAAAA. The full opinion in the case of California Trucking Association v. Bonta can be found here. Our previous alert discussing this issue can be found here.
Shawn Yadon, CEO of the California Trucking Association (CTA), issued the following statement in response to the decision by The U.S. Ninth Circuit Court of Appeals panel to reverse the preliminary injunction granted in January 2020 from the U.S. District Court. That preliminary injunction had blocked the State of California from enforcing Assembly Bill 5 (AB 5) upon motor carriers and independent owner-operators conducting business in the state. The new test was set forth in the Dynamex Operations West, Inc. v. Superior Court (Dynamex) ruling, which was subsequently codified by the California Legislature in the form of AB 5 in 2020:
“We continue to stand by our initial claim that the implementation of AB 5’s classification test is preempted by federal law and is clearly detrimental to the long-standing and historical place California’s 70,000 owner-operators have had in the transportation industry.
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The Ninth Circuit Court of Appeals held today that the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”) does not preempt application of California’s Assembly Bill 5 (“AB 5”), codified as amended at Labor Code section 2775, against motor carriers.
See Cal. Trucking Ass’n v. Bonta, No. 20-55106. This decision reverses a preliminary injunction against enforcement of AB 5 against motor carriers that a federal district court granted early last year. Employers in the transportation industry should take notice and review their independent contractor practices immediately.
The Facts
In September 2019, following the California Supreme Court’s decision in Dynamex Operations W. v. Superior Court, 4 Cal. 5th 903 (2018), California enacted AB 5, which codified the so-called “ABC test” for classifying workers as either employees or independent contractors. Subject to various exceptions, t