A federal district court has formally lifted the injunction blocking California’s enforcement of AB 5’s ABC test against motor carriers and independent truck owner-operators conducting business in the state. This means AB 5 will go into effect immediately for these transportation workers. Application of the ABC test under AB 5 will mean reclassifying drivers as employees in most cases.
The injunction had remained in place while the California Trucking Association (CTA) waited to see whether its case would be heard by the U.S. Supreme Court. But in June, the U.S. Supreme Court denied the petition to review California Trucking Association v. Bonta. ((April 28, 2021) U.S. Court of Appeal, Ninth Circuit, Case No. 3:18-cv-02458)
Although the CTA’s legal challenge will continue to be heard, truckers are now subject to AB 5 while the case proceeds.
Of concern for the trucking industry is the B prong of the ABC test, which defines an independent contractor as a worker who “performs work that is outside the usual course of the hiring entity’s business.” A trucking company hiring an independent owner-operator would presumably fail the B prong of the ABC test; all prongs must be met for the worker to be an independent contractor.
However, truckers should evaluate if they may qualify for the business-to-business contracting exemption from the ABC test.