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AB 5 no longer applies to the trucking industry, according to a CA judge

01.16.2020 - 11:43 AM Comments: 0

In what many consider to be a unilateral win for the trucking industry, AB 5 is no longer applicable to the trucking industry, according to a California state judge.

AB 5 was a bombshell piece of legislation in California, as it decimated the gig economy throughout the state. The law was meant to stop employers from falsely misclassifying employees as independent contractors, however, the law flopped as employers instead decided to oust many of their independent contractors.

In the trucking industry, AB 5 caused an abundance of confusion, as owner-operators were expected to lose their partnerships with carriers in California. 

Carriers such as Landstar, Prime Inc., Werner, and Swift-Knight had already begun to cut ties with their owner-operators or given them an ultimatum: become company drivers or move your operation out of the state.

Had the law not been challenged, it’s likely that owner-operators in the state would have ceased to exist. Nonetheless, Judge William Highberger ruled on Jan. 8 that truck drivers should not be reclassified as employees under AB 5, because the decision by California is preempted “by an act of Congress,” according to the L.A. Times. 

“Here the requirements of the ABC test … clearly run afoul of Congress’ 1994 determination that a uniform rule endorsing the use of nonemployee independent contractors should apply in all 50 states to increase competition and reduce the cost of trucking services,” Highberger wrote.

Nonetheless, the decision is not set in stone quite yet. A federal case against the law is still underway and a hearing on Jan. 13 saw a federal judge rule in favor of an extension for a temporary restraining order against the law.

For now, opponents of AB 5 have gained significant ground in fighting against its potential implementation. In addition to Highberger’s ruling, a federal court also granted a temporary restraining order on Dec. 31, which was the first win for opponents of AB 5.

That decision came after a motion by the California Trucking Association was introduced. Nevertheless, the bulk of the litigation is still to come, and it’ll be interesting to see how the law’s implementation continues to develop. 

So, what do you think about AB 5? Let us know in the comments or on social media!

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