9th Circuit Rules that the ABC Test is not Preempted by FAAAA
Today, April 28, 2021, the United States Court of Appeals for the Ninth Circuit, overturned an injunction which had protected motor carriers from complying with California's new independent contractor law. In its 2-1 ruling, the court ruled that the “ABC” test which was a central part of Assembly Bill 5 (AB 5) and changed how independent contractors are classified in California, is not preempted by the Federal Aviation Administration Authorization Act of 1994.
As you may recall, the ABC test presumes that all workers are employees and requires employers to prove in a 3-step process that an employee is an independent contractor. Those three steps are:
A. That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact.
B. That the worker performs work that is outside the usual course of the hiring entity's business.
C. That the worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.
Specifically, in its decision in California Trucking Association v. Bonta, the court held that AB 5 is not preempted because it “is a generally applicable labor law that impacts the relationship between a motor carrier and its workforce, and does not bind, compel, or otherwise freeze into place a particular price, route, or service of a motor carrier at the level of its customers.”
The California Trucking Association (CTA) has several options to appeal this decision, including a rehearing of this case or an appeal to the United States Supreme Court. Under special rules, which have been put in place due to the COVID-19 pandemic, CTA will have 14 days to request a rehearing of this case and 150 days to appeal to the Supreme Court. TRALA believes it is likely that CTA will appeal this ruling, but it is unclear whether they will request a rehearing or appeal to the Supreme Court. Under today's ruling, motor carriers will not be required to comply with AB 5 until 7 days after all appeals have been exhausted.
You may view the ruling by the Ninth Circuit Court of Appeals by clicking here. If you have any questions or concerns about this ruling, you may contact Andrew Stasiowski at firstname.lastname@example.org or Elizabeth Hyers at email@example.com or by calling (703)299-9120.