Truckers Get a Brief Reprieve- An AB5 Update

A further disruption to the nation’s supply chain was averted on Monday when the U.S. Supreme Court requested more information before making a decision on whether to hear the California Trucking Association’s lawsuit challenging Assembly Bill 5, California’s controversial worker-classification law.

AB 5 makes it illegal for companies to hire independent contractors except in narrow circumstances. The law applies an “ABC” test to define who is an independent contractor: only someone who is (a) free from an employer’s control and direction; (b) performing a service outside of an employer’s usual course of business; and (c) engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.

Under AB 5, trucking companies may not contract with independent owner-operators. The California Trucking Association contends that the state law is pre-empted by the Federal Aviation Administration Authorization Act, which bars any state law or regulation that affects “a price, route or service of any motor carrier” with regard to the transportation of property.

The Supreme Court has now asked the Biden administration for its view of the issue, requesting a brief from the U.S. Solicitor General on whether the FAAAA pre-empts California’s law.  If you don’t know, the task of the U.S. Solicitor General is to supervise and conduct government litigation and moreover, determines whether or not the government intervene in any appellate court basically the attorney for the Supreme Court you might say.

The immediate effect of the high court’s request is to temporarily preserve a federal injunction that has prevented AB 5 from going into effect against the trucking industry while the lawsuit goes through the courts. 

Had the justices simply denied the petition to hear the case, the injunction would have been lifted and some 70,000 independent owner-operators currently driving trucks in California would have been sidelined, exacerbating the current backlog at the ports and slowing deliveries all across the country.

Now this puts the Biden administration in an awkward situation. The supply chain crisis is causing problems throughout the economy and applying AB 5 to the trucking industry will make those problems worse, raising costs and worsening delays. Yet it is unlikely that the Solicitor General’s brief will argue against California’s law, because the current administration has fervently supported a very similar law at the federal level.

So, in my opinion, the only way that Biden is going to escape the rath of the people is for the Supreme Court to hear the case after the holidays when the backlog of ships is down to a minimum and then drop the proverbial bomb for the AB5 in 2022. 

H.R. 842, the Protecting the Right to Organize Act of 2021 — known as the PRO Act — would amend the National Labor Relations Act and related laws to expand the definition of “employee” in a way that draws in many people who are currently working as independent contractors. The PRO Act would apply the “ABC” test to workers nationally, impairing the ability of businesses to hire contractors and the ability of workers to sustain careers as freelancers.

The PRO Act was passed in the House of Representatives on March 9 by a vote of 225-206. It is currently sitting in the Senate Committee on Health, Education, Labor and Pensions.

In April, President Biden formed a task force to search for ways to strengthen the ability of workers to organize and join unions. That’s the aim of the PRO Act and AB 5; both seek to allow unions greater access to workers and eliminate barriers to unionizing. Under current federal law, only employees, not independent contractors, may unionize.

But laws that use government force to tilt the playing field toward union organizing are hurting people who want the flexibility and freedom of working independently. The PRO Act should stay stalled in the Senate, and AB 5 should be fully repealed.