Judge Keeps California’s Controversial Owner Operator Law on Hold
San Diego, CA – A federal judge has once again delayed enforcement of a controversial new California law which critics say could put as many as 70,000 owner operators out of business.
On December 31, 2019, U.S. District Judge Roger Benitez issued a restraining order blocking the state from enforcing its Assembly Bill 5 law, known as A.B. 5, for motor carriers until at least January 13, 2020.
The action was in response to a lawsuit filed in U.S. District Court in Southern California last November by the California Trucking Association (CTA) against California Attorney General Xavier Becerra challenging A.B. 5.
CTA was once again back in court on Monday arguing for a preliminary injunction to be issued in order to shield the trucking industry from enforcement of the law.
CTA argues the 1994 Federal Aviation Administration Authorization Act blocks states from enacting such laws and, thus, allows interstate trucking companies an exemption from A.B. 5’s statutes.
According to multiple reports and sources present inside the courtroom today, Judge Benitez extended the temporary restraining order (TRO), but stopped short of issuing a preliminary injunction.
According to an email blast sent by Scopelitis, a law firm specializing in trucking legal matters, the timing of a final decision on the request by the CTA “remains unclear, but [Scopelitis] anticipates an extension of the TRO for at least 14 days or until the order ruling on the preliminary injunction is filed.”
In Judge Benitez’s December 31, 2019 order he said the law would cause “imminent, irreparable harm” to carriers and owner operators.
“Without significantly transforming their operations to treat independent contractor drivers as employees … they face the risk of governmental enforcement actions, as well as criminal and civil penalties,” Benitez wrote.
Since the passage of A.B. 5 in September of 2019, major carriers such as Landstar, Prime and others notified its owner operators they would have to leave the state if they wished to continue working with the company.
Owner operators began exiting the state fearing the legislation’s imposed “ABC test” to determine status of an independent contractor would all but eliminate the owner operator model in California.
Specifically at issue is the the so-called “B prong,” which classifies a worker as an “employee” of the company unless that worker “performs work that is outside the usual course of the hiring entity’s business.”
Judge Benitez’s order does not, however, shield other industries from the law.
A.B. 5 continues to roil a host of professional services industries within the Golden State as well.
According to multiple local Californian news outlets, thousands of freelancers working as translators, photojournalists, cartoonists, musicians and more have already been laid off since the law took effect January 1, 2020.
Transportation Nation Network will continue to follow new developments.