Ninth Circuit Reverses Preliminary Injunction Preventing State from Enforcing Assembly Bill 5’s Worker Misclassification Test Against Trucking Companies

On April 28, 2021, the Ninth Circuit issued its decision in California Trucking Association v. Bonta, which reversed a preliminary injunction preventing the State of California from enforcing Assembly Bill 5’s “ABC” test against trucking companies.  Under that test, a worker is presumed to be an employee unless the employer can establish all three of the following requirements: (A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; (B) the worker performs work that is outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business.

The plaintiff trucking company association had argued that the B-prong of that test was preempted by the Federal Aviation Administration Authorization Act (“FAAAA”), a federal statute that deregulated the trucking industry.  A district court had agreed with the trucking association that the law was likely preempted and so enjoined it, but the Ninth Circuit reversed on appeal, holding that Congress did not intend for the FAAAA to preempt “laws of general applicability that affect a motor carrier’s relationship with its workforce.”  Under the decision, the State is permitted to use the “ABC” test, in its entirety, to combat misclassification in the trucking industry.

Altshuler Berzon LLP represents the International Brotherhood of Teamsters, which intervened in the case to defend the law alongside the state.  A news report on the decision can be found here.  A copy of the decision can be found here.