CTA continues to review contractor’s decision AB 5
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The California Trucking Association has asked the 9th US Circuit Court of Appeals for a full review by an appeals court of an earlier decision by a three-member panel regarding a state law that many trucking companies deem unfair to the industry.
On April 28, the three-judge panel dismissed a preliminary injunction from a lower court that had halted implementation of California’s so-called AB 5 law, which seeks to reclassify independent contractors as employees. . In its May 26 appeal of the decision, the CTA said the court should grant a new hearing on the grounds that the earlier decision “conflicts with the decisions of the United States Supreme Court and that court and creates a acknowledged conflict with a decision of the US Court of Appeals for the 1st Circuit. “
“California Assembly Bill 5, which passes a new test to determine whether a worker should be treated as an employee for purposes of California labor law, effectively prohibits motor carriers from using independent drivers, ”CTA’s call said. “The law therefore makes illegal a key feature of the road transport market in California.”
The group is asking for a bench hearing, during which the 29 judges of the 9th Circuit would vote on whether to repeat the case. If a simple majority agrees to review the committee’s decision, a clerk would then assign 11 judges to hear it, according to Greg Feary, managing partner of Indianapolis-based law firm Scopelitis, Garvin, Light, Hanson and Feary PC.
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In October 2018, the CTA filed a lawsuit to ban enforcement, arguing that the Federal Aviation Administration Authorization Act of 1994 prevails over the new AB 5 standard because, as applied to road carriers, this standard “concerns a price, a route or a service of a road carrier. He repeated that statement on the bench appeal.
CTA said the owner-operator model is essential for the trucking industry because it “enables expansion in times of plenty and contraction during business shortages.” Unlike employee-driver fleets, owner-operator fleets can relatively easily expand and contract to meet changing demand, the call said.
“By contracting with owner-operators, motor carriers can therefore provide specialized trucking services that could not be offered by motor carriers who have their own fleets and depend solely on employed drivers,” said the call.
At the center of the legal dispute is the three-pronged “ABC test” of California law that requires motor carriers to classify their workers as employees unless the employer demonstrates that the worker is free from the control of the entity that is. hiring; performs work outside the ordinary course of business of the hiring entity; and usually works in an independent trade or profession.
The second element of the three-part test is one that many carriers say is nearly impossible to demonstrate.
In its appeal, the CTA argued that AB 5 was aimed at changing the business methods of hauliers and accused the authors of wanting to force hauliers to abandon what was seen by the state as a proprietary business model. -exceeded operator.
“The drafters exempted dozens of other professions and industries from the ABC test, but not the road hauliers,” the CTA appeal argued. “AB 5 therefore represents an effort to regulate the services of road hauliers themselves. the [three-judge] The conclusion of the majority of the panel that AB 5 is not preempted is therefore irreconcilable with the Supreme Court precedent, which requires further examination.
The earlier 2-1 appeal committee decision said the district court abused its discretion by prohibiting the state of California from applying AB 5 to highway carriers doing business in California, saying the law was a “generally applicable labor law which affects a motor carrier’s relationship with its workforce and does not bind, obligate or freeze the prices, routes or services of motor carriers, and is not preempted by the FAAAA. “
However, the earlier district court ruling ruled that CTA had standing and was likely to succeed on the merits of its claim. He therefore banned the state from applying AB 5 to any highway carrier doing business in California.
The California Attorney General and the International Brotherhood of Teamsters appealed the district court ruling to the 9th Circuit.
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