The GigReporter

Overdrive reports[1] that the Owner-Operator Independent Drivers Association’s (OOIDA) lawsuit against California’s AB5 independent contractor law is now on appeal before the Ninth Circuit Court of Appeals. The state of California, and the Teamsters’ Union as an intervening defendant, have filed responses to OOIDA’s opening appeal brief.

AB5 imposes a strict ABC independent contractor status test on most workers in California, including truckers. OOIDA argues the law unconstitutionally burdens interstate commerce by discriminating against interstate owner/operators whose vehicles are leased by motor carriers because the B2B exemption is functionally unavailable to interstate leasing truckers, who must comply with federal regulations requiring the motor carrier lessee to have exclusive possession and control of the leased equipment. (See 49 CFR § 376.12(c)(1).) According to OOIDA’s challenge, compliance with both the federal regulations regarding control over leased equipment and the independence requirement of the California B2B exemption is impossible, and so the exemption is only effectively available to purely intrastate leasing truckers, to the detriment of interstate commerce.

In response, the defendants argue that control over leased equipment is not the sort of control relevant to examining the B2B exemption, and that control mandated by government regulation is not counted as control for the purposes of state independent contractor tests, citing Linton v. Desoto Cab Co., 15 Cal. App. 5th 1208, 1223 (2017). California also noted that the federal regulation at issue expressly disclaims any effect on independent contractor status determinations, see 49 CFR § 376.12(c)(4).

Regardless of how the appeal is resolved, it is very helpful that California has taken an official position that compliance with federal truth-in-leasing regulations does not count as control for determining independent contractor issues.  It remains to be seen however how that will play out in future AB5 cases.

[1] “California, Teamsters respond to OOIDA's AB 5 appeal”, https://www.overdriveonline.com/regulations/article/15707980/ab-5-update-california-teamsters-repond-to-ooida-appeal , November 11, 2024.