AB5 is now set to go into effect in the California trucking sector. On June 30, the US Supreme Court denied review of the appeal that represented the California Trucking Association’s last-ditch effort to keep the independent contractor law away from its operations.
The 9th Circuit Court of Appeals, which had earlier nullified the injunction that kept AB5 out of California trucking, must dissolve the stay that had allowed the injunction to remain in place while CTA made its push toward the Supreme Court.
With the Supreme Court handing down its denial without comment, dissolving that injunction is expected to happen quickly. When it does, the independent owner model for trucking in the state of California will be entering a new world with little precedence.
At the heart of AB5 is the ABC test, and further, the B prong of ABC. That B test defines an independent contractor as a worker who is engaged in “work that is outside the usual course of the hiring entity’s business.”
A trucking company hiring an independent owner operator to move freight would presumably fail that test in any litigation.
The California Trucking Association said in a statement, “Gasoline has been poured on the fire that is our ongoing supply chain crisis. In addition to the direct impact on California’s 70,000 owner-operators, who have seven days to cease long-standing independent businesses, the impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs and worsening runaway inflation.”
“With AB 5 now set to go into effect, thousands of owner-operators driving in California face an uncertain future. California has provided no guidance to owner-operators about how they can work as independent contractors under this new scheme, and truckers will be at the mercy of the courts to interpret how the law will be applied.” said Todd Spencer president of the Owner-Operator Independent Drivers Association (OOIDA).
More information is available here