Supreme Court Refuses to Hear Trucking Association’s Lawsuit

The U.S. Supreme Court on Thursday declined a case from a trucking group that argued a California law concerning worker classification would severely harm the industry.

The 2019 law, known as AB5, classifies most workers as employees rather than independent contractors, which is a model trucking companies have traditionally used to lower operational costs. The California Trucking Association (CTA) sought to challenge the law, claiming it ran counter to federal regulations applicable to the industry.

The CTA wanted the Supreme Court to review a ruling from the 9th U.S. Circuit Court of Appeals that stated that AB5 is a generally applicable labor law and is not superseded by the Federal Aviation Administration Authorization Act (FAAAA). This act prevents states from regulating various aspects of the trucking industry, including pricing and routes.

In response to the ruling, the CTA expressed disappointment, stating the prohibition against independent truckers would have long-lasting negative effects on interstate commerce and communities in California. A spokesperson from the California Attorney General’s office expressed satisfaction with the court’s decision.

Previously, last October, the Supreme Court opted not to review another case that challenged AB5’s applicability to truck drivers. On Monday, they also denied a lawsuit from freelance worker groups arguing that the law is unconstitutional.

AB5 implemented a test established by the California Supreme Court in the 2018 Dynamex case to determine if workers qualify as independent contractors. The “ABC test” stipulates that workers are employees if they are under the direct control of a company, if they are part of its primary business operations, or if they lack independent business operations.

The implications of this classification are significant for businesses, as employees are entitled to benefits such as minimum wage and overtime, making them more costly than independent contractors. The trucking industry has heavily relied on independent contractors who own and operate their trucks. Trade organizations and gig economy companies have lobbied against AB5, arguing it restricts workers’ flexibility and their ability to juggle multiple jobs.

The case was officially titled California Trucking Association v. Bonta, U.S. Supreme Court, No. 21-194.