AB-5 Update: Construction Truckers Covered

In the ongoing legal battle surrounding California’s controversial AB-5 decision, which reclassifies truck drivers among other things, regional transportation associations have been looking for some guidance. The state’s Attorney general, trucking companies, independent trucking contractors, and Uber and Lyft are all involved in the matter, as all are trying to find common ground when it comes to classifying employees and obtaining the right benefits and insurance coverage.

But in recent weeks, the Western States Trucking Association, a non-profit trucking association that helps protects the rights of trucking companies, scored a major win against the AB-5 California mandate by forcing the government to renounce the plain language involved in the bill, and instead agree to treat construction trucking like all other motor carriers. While this AB-5 Win may seem small, it’s a step in the right direction for everyone from truckers to the companies they work for in the state.

As a result of this decision, all members of the construction trucking industry, a major player in the state’s economy, are now fully protected by the injunction against the ABC testing, which reclassifies workers.

The Dynamex Decision

In 2018, the Supreme Court of Los Angeles set the foundation for AB-5, which spurred on legislation that reclassified trucking professionals as employees instead of independent contractors. AB-5 codified the Dynamex decision and applied a test to any industry that was not given an exception in the law. Some of the exceptions included wholesale exemptions, meaning they could still use the traditional test.

However, only construction trucking was singled out for an exception that was worse than the ABC test itself. Under the terms of AB-5, construction trucking was called out to mandate an employment relationship between trucking independent contractors. Any time a trucking company sought to subcontract some or all of the construction trucking work on a particular construction trucking job, whether by using independent truckers or other trucking companies, they would be deemed the employers for all trucks working on that job.

The order now targeting WSTA’s complaint highlights that in light of the state’s interpretation of the law, their trucking members have no threat of something hanging over their heads when it comes to prosecution under the challenged provisions. As a result, WSTA members and construction trucking drivers are subject to the ABC test like everyone in the industry and are protected from the enforcement of the test.

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.

AB-5 Legislation Update

The state of California has asked a federal court to begin lifting the preliminary junction against imposing AB-5 on the state’s trucking industry. The requests to the Court of Appeals for the state’s 9th Circuit is part of the appeal of the attempt by the California Trucking Association (CTA) to be granted an injunction against the position that AB-5 has put the trucking industry in.

The state’s AB-5 Legislation has been a topic of controversy for over a year now. What it does is move 2018’s Dynamex California Supreme Court decision into law, which established an ABC test to determine the status of an independent contractor that could essentially eliminate the owner-operator model in California, and disrupting everything from investing in commercial truck insurance, such as general liability insurance, and the sharing economy.

According to the appeal by the attorney general’s office, the law set in place by the FAA in the early 90s “preempts state and local regulation that has a significant effect on the prices, routes or services of motor carriers.” This has been the position of the CTA as well and a case they have been trying to make since AB-5 began picking up steam last year.

The state’s appeal is mostly looking at the prices, routes, and services, as mentioned above, in the preliminary injunction. The state cited legal precedents that it said should be looked at as meaning that state labor regulations are not preempted by the Federal Aviation’s act.

Independent Contractors and Trucking Companies

If the argument that AB-5 doesn’t entirely ban the hiring of independent contractors as truck drivers by a company, the state’s argument stays focused on prices, routes, and services. The test brought on by AB-5, the ABC test, and the earlier standard used to decide if someone is a full-time employee or a contractor do not define the rights or benefits that a trucking carrier has to provide its drivers.

The state went on to argue that the decision to grant the injunction then offers no “substantive analysis on what impact labeling motor carriers’ drivers to be ‘employees’ will have on prices, routes, and services”. The state argues that what might be seen as a hurried nature of the CTA action is reason enough to overturn the injunction.

The state’s filing says the ABC test became a reality for trucking companies and their drivers with the Dynamex decision, which was put into place in April of 2018. However, the injunction wasn’t put into motion until December of 2019, plenty of time for the plaintiffs to seek injunctive relief during that time period.

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!