“SETBACK” : Here is a short press release from the California Trucking Association (CTA) on the recent decision of the United States Supreme Court to “deny cert”(refuse to hear) an appeal to a lower court decision that will dissolve an injunction that has kept truckers exempt from AB 5 for almost two years:
California Trucking Association Responds to
U.S. Supreme Court’s decision to Deny Cert on CTA v. Bonta
(SACRAMENTO) — The California Trucking Association (CTA), issued the following statement today in response to the U.S. Supreme Court’s decision at its recent conference to deny cert in CTA v. Bonta, the Association’s case challenging California’s Assembly Bill 5 (AB 5) law:
“Gasoline has been poured on the fire that is our ongoing supply chain crisis.”
“In addition to the direct impact on California’s 70,000 owner-operators who have seven days to cease long-standing independent businesses, the impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs and worsening runaway inflation.
“We are disappointed the Court does not recognize the irrevocable damage eliminating independent truckers will have on interstate commerce and communities across the state. The Legislature and Newsom Administration must immediately take action to avoid worsening the supply chain crisis and inflation.”
END
OPTIONS AHEAD:
ONE: A key phrase in the CTA press release is at the end: “The Legislature and Newsom Administration must immediately take action to avoid worsening the supply chain crisis and inflation.”
Discussion: Right now, the California Legislature is gone from Sacramento for a one-month “Summer Recess.” The Legislature will return on August 1 for the final month of the 2021-2022 two-year legislative session. During that month, legislation will likely be introduced to “fix” this setback. CTA is setting the stage for that battle. ACL will be part of that battle, which should actually not be a battle at all, but rather an agreement with those who supported AB 5 that it does not provide a formula to keep independent truckers in business — which simply should not be the case at time of supply chain problems (from baby formula to pet food) and high inflation.
TWO: In another statement, Todd Spencer of the Owner-Operator Independent Drivers Association, said “With AB 5 now set to go into effect, thousands of owner-operators driving in California face an uncertain future….California has provided no guidance about how they can work as independent contractors under this new scheme, and truckers will be at the mercy of the courts to interpret how the law will be applied…we know this will not be the last word on the legality of AB 5 and expect to participate in future challenges. “
Discussion: As Mr. Spencer notes, there will likely be future legal challenges to AB 5 in general and its trucking provisions in particular. ACL will be part of those.
At the same time, Mr. Spencer’s phrase “truckers will be at the mercy of the courts” reminds us that as truckers AND logging companies work to comply with AB 5 under the “Business to Business Exemption,” it is our belief at ACL that this kind of “good faith” conducting of your business remains the way to best handle AB 5. In short, AB 5 has not been fully “vetted by the courts” as to how it is supposed to work.
THREE: While ACL believes that you should confer with an attorney to best work out your “AB 5 compliance approach”(demonstrating that you work with independent contractors and not employees), we also recommend that you review the “Business to Business Exemption” in AB 5 as the best means to do so.
ACL has a “package of materials” about AB 5 and the “Business to Business Exemption.” We mailed this package out to all members when AB 5 took effect. If you would like a copy of the ACL AB 5 package, please e-mail ecarleson@calog.com or call the ACL office at 916-441-7940.
NOTE IN PASSING: AB 5 became law on January 1, 2020 — and the “coming of COVID” in March of 2020 impacted a lot of work on it. Courts were slowed down and state enforcing agencies lost employees to remote work. Now in 2022, AB 5 is starting to come to life again, “post COVID.”
SUMMARY:
AB 5 is too complicated an issue for this one message to review in detail, but ACL has been involved in work on AB 5 for several years, and will continue to serve your interests on AB 5 in the future. Please contact the ACL office if you have any questions.