Ninth Circuit deals blow to motor carriers

On April 28, 2021, the Ninth Circuit reversed a district court’s order preliminarily enjoining enforcement of California Assembly Bill 5 against motor carriers doing business in California.  As readers know, AB 5 codified the “ABC” Test for classifying workers as either employees or independent contractors, as adopted by the California Supreme Court in Dynamex Operations W. v. Superior Ct., 4 Cal. 5th 903 (2018). In California Trucking Association v. Bonta, a split panel of the Ninth Circuit held the district court abused its discretion in enjoining enforcement of AB 5 on the grounds it was preempted by the Federal Aviation Administration Authorization Act (FAAAA). In so holding, the Ninth Circuit determined AB 5 “is a generally applicable labor law that affects a motor carrier’s relationship with its workforce and does not bind, compel, or otherwise freeze into place the prices, routes, or services of motor carriers.” As such, AB 5 is not preempted by the FAAAA. 

In dissent, Judge Bennett wrote that, as applied to California Trucking Association’s members, the FAAAA preempted AB 5 because it both affects a motor carriers’ relationship with their workers and significantly impacts the services motor carriers are able to provide to their customers.