US: California’s AB 5 Injunction Overturned on Appeal

A federal appeals court in California ruled that truck drivers should be classified as employees. This ruling overturns an injunction that made the trucking industry exempt from AB 5, California’s strict law on worker classification enacted in 2019.

The lawsuit, filed by the California Trucking Association and two independent owner-operator truck drivers, argues that the worker classification test established by AB 5 violates the Federal Motor Carrier Safety Act and the Federal Aviation Administration Authorization Act of 1994 (F4A). Over 70,000 truck drivers in California are reclassified as employees under the law.

The California Trucking Association is prepared to take this case to the US Supreme Court, citing a 2016 Massachusetts ruling where a similar worker classification law was found to have violated federal law. AB 5 has received pushback from other industries, including an amendment passed last year – though currently being challenged – that exempts app-based ride-hailing and delivery services from AB 5.

Takeaway: The truck driver ruling underscores the need for organizations to prepare for regulatory changes that could influence their access to critical talent engaged through a freelancer relationship. An expert view into the political and legal developments can help them understand what additional changes may occur due to court rulings and related events.

US: California’s AB 5 Injunction Overturned on Appeal

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