People v. Superior Court (Cal Cartage): California Court of Appeal, Second Appellate District Ruling on AB5: The Bad and the Good

By now everyone who reads the NorthAmerican Transportation Association (NTA) e-mails knows that AB5 for California truckers is back on the table. Despite the preliminary injunction issued by San Diego U.S. District Court Judge Benitez in California Trucking Association v. Becerra, the California Court of Appeal Second Appellate District in Los Angeles ruled that AB5, now enacted into law in California Labor Code Sections 2775 does apply to truckers based in California.

           AB5 in large part is codified in California Labor Code 2775 which prohibits an employer from misclassifying a worker as an independent contractor under the “ABC” test. However, the Court of Appeal ruling addressed the business-to-business exemption in California Labor Code Section 2776. In the opinion of the Court of Appeal this is the escape hatch for owner operators and the carriers to whom they lease their trucks under the California Highway Patrol regulations in 13 CCR 1235.7 and their federal counterpart in 49 CFR 376.

Section 2776 has a number of requirements that must be satisfied to qualify for the exemption and carriers and their owner operator independent contractor lessors can adjust their operations in order to comply. Those seeking advice can contact their own lawyers.

But one of these requirements is worth noting.  Section 2776(a)(8) requires that “[t]he business service provider advertises and holds itself out to the public as available to provide the same or similar services.” There are many ways to do that and NTA has a very inexpensive solution which is worth pursuing.

Miles L. Kavaller

6355 Topanga Cyn Blvd., Ste 518

Woodland Hills, California 91367

Tel.: 818-992-4243

Cell: 310-994-1385

eFax: 818-436-5981