The trucking industry in California has been caught up in a whirlwind of legal battles in the last few months as new legislation has been proposed, passed, and protested around the classification of workers in the industry. Everyone from truck drivers to dock workers to independent contractors are all involved as the state’s new AB5 bill, which represents a total change in how these employees can receive benefits and even find the right level of commercial Truck insurance for their daily operations.
Now, in a new appeal, truckers and teamsters in the industry are voicing their concern. A U.S. District Court judge has issued a preliminary injunction in the AB5-related case of California Trucking Association, et al., v. Attorney General Xavier Becerra, et al., and International Brotherhood of Teamsters temporarily blocking the ABC test.
What is the AB5 Bill?
AB5 essentially codifies the Dynamex case from April 2018 in which California’s Supreme Court determined that an ABC test must be used to determine worker classification in wage-order claims. Under this new test, a worker is presumed to be an employee. To go about this in a successful way, a company must demonstrate that the worker satisfies all three parts of the test.
These three parts include:
- The worker is free from control and direction in the performance of their services
- The worker is performing work outside the usual course of the business of the hiring company
- The worker is customarily engaged in an independently established trade or business
AB5 makes the ABC Test the law in the state, but it also expands beyond wage-order claims to all provisions under the state Labor and Unemployment Insurance codes.
Making Their Appeal
The AB5 test went into effect on January 1 of this year and has faced plenty of backlash already from the trucking industry as well as the gig economy, a major player in the state with companies like Lyft and Uber. The California Trucking Association and two independent motor-carriers won a preliminary injunction on January 16, after a judge found that they’d established a likelihood of success on the merits of the arguments they were making.
The truckers involved in the injunction argued that FAAA preempts the ABC test because it requires them to classify all drivers as employees, causing major interference with their routes, services, commercial truck insurance, and prices.
The following is a statement from Julie Gutman Dickinson, local counsel to the Teamsters Port Division:
“We are not surprised by the Court’s decision to issue a preliminary injunction blocking application of AB5’s ABC test to California truck drivers; however, the decision does not impact port and rail drivers’ fight for their employee rights and an end to systemic wage theft. The bottom line is that in every port trucker misclassification/wage theft case to date, misclassified California port truck drivers have been found to be employees NOT independent contractors under the California Borello test. It simply does not matter whether you apply the ABC test under Dynamex, AB5, or the Borello test, they are employees under all tests. The Court’s preliminary injunction has no practical effect on the employee status of these drivers—they are clearly employees.
In Regards to Wage Claims
“In over 500 wage claim cases at the California DLSE, drivers have uniformly been found to be employees NOT independent contractors under the Borello test. There is not one case that I am aware of where any driver has been found to be an independent contractor under Borello. And in all private litigation I have participated in and am aware of, port and rail drivers have uniformly been found to be employees under the Borello test. Indeed, the Ninth Circuit Court of appeals has made crystal clear that Borello is NOT preempted under the FAAA.
“The question of whether the ABC test is preempted will go through legal proceedings before there is any final determination. Even if ultimately prong B is found preempted, prongs A and C should remain intact as they have in other jurisdictions. Further, even if the ABC test as a whole were ultimately found to be preempted for interstate drivers, it would still be immaterial to the fact that these drivers have been uniformly found to be employees under Borello, a test that has definitely been determined NOT to be preempted.”
About Western Truck Insurance Services
Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!