Judge Puts Controversial California Independent Contractor Law on Hold
Sacramento, CA – The enforcement of a controversial new California law which critics say could put as many as 70,000 owner operators out of business has been put on hold by a federal judge.
On December 31, U.S. District Judge Roger Benitez issued a restraining order blocking the state from enforcing its Assembly Bill 5 law, known as A.B. 5, for motor carriers until at least January 13, 2020.
The action was in response to a lawsuit filed in November by the California Trucking Association (CTA) against California Attorney General Xavier Becerra challenging A.B. 5.
CTA says the new law “will put tens of thousands of owner operator truckers, who service agriculture, retail and other industry sectors, out of business.”
Some estimates report as many as 70,000 owner operators and independent contractors will be impacted.
The law was set to take effect January 1, 2020 and prompted major carriers such as Landstar, Prime and others to notify its owner operators they would have to leave the state if they wished to continue working with the company.
Judge Benitez says the law would cause “imminent, irreparable harm” to carriers and owner operators.
“Without significantly transforming their operations to treat independent contractor drivers as employees … they face the risk of governmental enforcement actions, as well as criminal and civil penalties,” Benitez writes.
The court will now consider a longer stay of enforcement for motor carriers.
CTA’s suit effectively argues the 1994 Federal Aviation Administration Authorization Act blocks states from enacting such laws and, thus, allows interstate trucking companies an exemption from A.B. 5’s statutes.
Arguments in the case are set to resume on January 13, 2020.