On the eve of the Assembly Bill 5 (“AB 5”) effective date, Judge Roger Benitez granted the California Trucking Association’s (“Association”) request for a Temporary Restraining Order to prevent enforcement of the law which the Association argued requires truckers to be classified as employees instead of independent contractors.
On January 13th, Judge Benitez heard arguments regarding the Association’s request for a preliminary injunction. Preemption based on the Federal Aviation Administration Authorization Act (“FAAAA”) is the Association’s primary argument supporting its request for the injunction. The Association argued that AB 5 is an all-or-nothing law, in that it requires all trucking industry carriers to classify all truck drivers as employees. Defendants, and intervenors, including the International Brotherhood of Teamsters (“Teamsters”), argued in response that application of AB 5 provides a business-to-business (“B2B”) exception. The Association’s rebuttal included that B2B does not apply to the owner-operator contractual relationships between drivers and trucking companies.
Judge Benitez asked both sides to explain the practical impact of AB 5 on the delivery of goods, including how many industry carriers will be affected in state and out-of-state. His questions seemed to emphasize the position that enforcement of AB 5 on truck drivers will directly impact the interstate delivery of goods, including potential increased costs to industry and increased prices for consumers. The Teamsters insisted Judge Benitez consider a recent decision from the Ninth Circuit Court of Appeal in response to the Judge’s question regarding direct impact. The reference to the Ninth Circuit case failed to answer the Judge’s question. Despite Judge Benitez’s displeasure with the timing of the Association’s holiday filing requesting the Temporary Restraining Order, his disposition seemed to suggest he would decide in favor of the Association, largely due to the impact on interstate commerce.
Jackson Lewis will continue to monitor the status of the Association’s case and other cases pertaining to the application of AB 5. Please contact a Jackson Lewis attorney with any questions.