AB5 specifically targets interstate truckers, OOIDA says -

In an appeal to the U.S. Court of Appeals for the Ninth Circuit, the Owner-Operator Independent Drivers Association contends that California’s AB5 specifically targets truck drivers and violates the Constitution.

OOIDA and the California Trucking Association are continuing their lawsuit against the controversial worker classification law known as Assembly Bill 5. The trucking groups filed opening briefs to the Ninth Circuit on Monday, Aug. 5.

“AB5’s blanket prohibition of leased owner-operators constitutes an unreasonable burden on interstate commerce in violation of the dormant Commerce Clause of the U.S. Constitution under the test established by the Supreme Court in Pike v. Bruce Church Inc.,” OOIDA wrote. “Under Pike’s balancing test, AB5’s burden on leased owner-operators is absolute, and the benefits to the state are minimal, if not illusory. There is no cost truckers can incur or administrative hurdle they can overcome to keep their independent contractor small businesses as leased owner-operators.”

What is AB5?

California signed AB5 into law in 2019. The law is based on the ABC Test and requires a business to demonstrate three factors are established before a worker can be considered an independent contractor.

The B prong of the ABC Test requires the worker being used as an independent contractor to provide a service that is outside the company’s usual course of business.

OOIDA said the B prong effectively ends the leased owner-operator model in the trucking industry.

“This provision effectively prohibits an entire sector of small-business truckers from operating in California: individual truck owner-operators who lease their truck and driving services to move freight as independent contractors for motor carriers,” OOIDA wrote. “Because leased owner-operators’ work is within motor carriers’ usual course of business – moving freight by truck – they cannot work as independent contractors for motor carriers under the ABC Test.”

The lawsuit was filed by the California Trucking Association shortly after AB5 was passed. Soon after, a preliminary injunction was issued to prevent AB5 from being applied to the trucking industry.

In 2022, the case was kicked back to the lower courts after the Supreme Court declined to hear arguments related to AB5 violating the Federal Aviation Administration Authorization Act. OOIDA then joined the case as an intervenor to represent out-of-state truckers who could be harmed by the California law.

This past March, a district court ruled in favor of the state. OOIDA and the California Trucking Association then filed for an appeal to the Ninth Circuit.

OOIDA’s arguments

OOIDA, which represents small-business truckers, said that AB5 is not a law of general applicability.

“AB5’s prohibition of leased owner-operators applies not only to truckers who live in California,” OOIDA wrote. “It extends to all leased owner-operators who work in California, regardless of where they are from or how little time they spend in California to pick up or drop off freight in interstate commerce. This prohibition of leased owner-operators was not an accidental byproduct of a law that was purportedly passed to address worker misclassification. The sponsor of the legislation, a then-former (and again current) International Brotherhood of Teamsters official, publicly stated that one of AB5’s purposes was to eliminate this sector of the trucking industry.”

OOIDA also contends that AB5 violates the Commerce Clause, which prevents states from interfering with interstate commerce. The Association said the law also violates the Equal Protection Clause.

“AB5 provides a Business to Business exemption to the ABC Test that California intrastate truckers can use but federally regulated interstate truckers cannot,” OOIDA wrote. “The availability of the B2B exemption to California-based intrastate truckers but not interstate truckers not only discriminates against interstate commerce, but it also violates the Equal Protection Clause. For a law adopted for the purpose of classifying California workers under the ABC Test, there is no rational basis for the California legislature to provide an exemption for local intrastate – but not interstate – truckers.”