California Trucking Association Ends Legal Action Against AB 5 Worker Reclassification Law

In 2019, the California legislature enacted a law for determining whether a worker is classified as an employee or independent contractor. The law consisted of three factors known as the “ABC test.” Shortly thereafter, litigation was initiated by multiple entities, including the California Trucking Association, seeking to exempt owner-operator truck drivers from the law. The concern was over the B-prong of the ABC test, which requires a worker to be customarily engaged in an independently established business. Because owner-operators work within motor carriers’ usual course of business (transporting freight by truck), the ABC test would not permit such workers to be classified as independent contractors.

After years of litigation over this issue, the California Trucking Association (“CTA”), has decided to end its direct involvement in the fight. The decision comes after a deferral district court denied the CTA’s motion for preliminary injection and trial on merits, issued on March 15, 2024. Despite CTA’s withdrawal, the fight over reclassification continues in the form of an appeal spearheaded by the Owner-Operator Independent Drivers Association. The crux of its appeal is centered on preemption, arguing that a federal law, known as F4A, prohibits states from enacting of enforcing a law that imposes on the “price, route or service of any motor carrier.”