Denial issued to the California Trucking Association's petition to CA Assembly Bill 5

As IAM has reported on and followed over the past two years, today the U.S. Supreme Court formally declined to consider challenges brought by the California Trucking Association to CA Assembly Bill 5, which laid out specific criteria for determining a worker’s classification status, as either an employee or independent contractor, through an evaluation commonly referred to as the "ABC test".

The ABC test is the core of the legislation, and is used to determine a worker's status. Specifically, it states a worker must be classified as an employee, and not a contractor, unless employment meets all of the following conditions:

A - The individual is free from direction and control applicable both under the contract for the performance of service 

B - The service is performed outside the usual course of business of the employer

C - The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed

The B condition of the test presents a clear challenge to owner-operators with common lease arrangements with motor carriers and other transportation companies. It may also present challenges to other workers and their present classification within the moving and storage industry, depending on their current employment arrangements. An earlier court ruling had placed an injunction (pause) to the law taking effect, citing CTA's position that the Federal Aviation Administration Authorization Act of 1994 preempted the ABC test, specific to trucking interests. The FAA Act specifically preempts any state-level laws that would interfere with interstate prices, routes and services of motor carriers. 

IAM will continue to follow the impact of the Supreme Court's decision to decline the case, and when the temporary injunction (pause) will be lifted, officially setting the law into effect. For more information or if you have any questions in the interim, please contact Bryan Vickers (703-403-2882, bvickers@pacellp.com) with IAM's Government and Regulatory Affairs Team.