California court says trucking fleets must provide drivers with full employment benefits

The Teamsters Union is cheering an appeals court decision today holding that truck drivers are full employees and not just independent contractors of the trucking fleet that pays them, and should thus qualify for job benefits such as sick leave, health insurance, and worker’s compensation.

The 9th Circuit Court of Appeals ruled against a position by the California Trucking Association (CTA), which had argued that the Federal Aviation Administration (FAA) Authorization Act would preempt California’s Assembly Bill 5 (AB-5) law from determining whether workers are employees or independent contractors. Specifically, the court reversed a preliminary injunction granted in 2020 by the U.S. District Court that had blocked the state from enforcing AB-5 upon motor carriers and independent owner-operators conducting business in the state.

While AB-5 applies only to business operations in California, it has been closely watched by transportation industry experts because it could set a standard for other states to adopt.

Indeed, trucking industry groups quickly lined up to organize an appeal of the latest decision. “We continue to stand by our initial claim that the implementation of AB-5’s classification test is preempted by federal law and is clearly detrimental to the long-standing and historical place California’s 70,000 owner-operators have had in the transportation industry,” CTA CEO Shawn Yadon said in a release. “The California Trucking Association will take whatever legal steps are necessary to continue this fight on behalf of independent owner-operators and motor carriers operating in California.”

Such a petition would have to come fairly quickly, as the parties involved have 14 days to seek a rehearing and up to 150 days to petition for certiorari with the U.S. Supreme Court, according to analysis of the ruling by transportation law firm Scopelitis, Garvin, Light, Hanson & Feary. Absent that move, the injunction could be lifted as early as May 19, but it is difficult to predict the precise date when the injunction will be lifted and AB-5 can be enforced against motor carriers, the law firm said.

In the meantime, labor groups are celebrating the decision as a “massive victory for California’s truck drivers.”

“Today, we are one step closer to justice for truck drivers at the Ports of Los Angeles and Long Beach. Throughout the pandemic, port drivers have been standing up for their rights despite trucking companies misclassifying them as independent contractors, failing to provide them with PPE and denying them basic benefits like unemployment insurance and paid sick leave,” International Brotherhood of Teamsters Port Division Director Ron Herrera said in a release. “With the 9th Circuit’s decision, we have state law protections to fight misclassification and make clear that these drivers are employees, not independent contractors, entitled to the same rights and protections as any other employee.”