US Supreme Court Refuses to Hear Challenge to AB 5 Law that Makes Contract Drivers almost Impossible

In what may be a fatal blow for independent and contract truck drivers in California, the US Supreme Court finally refused to take a case challenging a law there that makes it almost impossible for divers to not be classified as an employee of a trucking company.

Surpply Chain Digest Says...   In a friend of the court brief OOIDA sent to the justices, the organization noted that many independent contractors prefer their independent status, usually due the flexibility and economic opportunity that status provides them. What do you say? Click here to send us your comments Click here to see reader feedback

On June 30, the court refused to hear the case that was a legal challenge by the California Trucking Association (CTA) against the state's so-called “AB 5” law, which in 2018 set up a three-part test to see if a worker across virtually any job type could be treated as a contractor.

The test will be almost impossible for independent truckers to pass, meaning with Supreme Court denial apparently they will have to become carrier employees, take up another profession, or leave the state.

The decision was something of a surprise, as Federal law preempts state laws on trucking, so that carriers don’t face a patchwork of laws that vary in each state.

But the Court forgot about that legal principle, voting to refuse to take on the case without comment.

With the decision, a lower court injunction that stopped enforcement of the law has been lifted, making the law immediately enforceable.

And based on comments from by California Attorney General Robert Bonta, it won’t take long for that to happen.

It is not clear yet how the law will be enforced. Some carriers may proactively decide to stop contractual relationships with drivers. Or, will contract drivers themselves demand to use the three part test? Another possibility: the state’s Division of Labor Standards Enforcement office could make moves against carriers.

Regardless, the issue of AB 5 appears definitively over in state’s favor.

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“I think it’s a done deal,” Greg Feary, president of the Indianapolis-based trucking law firm Scopelitis, Garvin, Light, Hanson & Feary, told the ATA’s Transport Topics magazine. “They could ask the Supreme Court for reconsideration, but I don’t think they’re going to do that. That’s kind of a Hail Mary pass that’s virtually never caught.”

“AB 5 is so wide-ranging that knowing how to comply is impossible for many directly working in trucking,” said Todd Spencer, president of the Owner-Operator Independent Drivers Association (OOIDA). OOIDA was against the law, but was at the same time critical of how many carriers treat drivers.

In a friend of the court brief OOIDA sent to the justices, the organization noted that many independent contractors prefer their independent status, usually due the flexibility and economic opportunity that status provides them.

Despite the seeming finality on the issue, the CTA says it is reviewing its options and believes that there are still some legal pathways it can pursue.

But the big question is this: will similar laws be seen in other states?

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