Trucking sector in peril due to Assembly Bill 5
Late last month, the U.S. Supreme Court declined to take up a case involving Assembly Bill 5 and its deleterious impacts on the trucking industry. The trucking industry is warning that the application of AB 5, which restricts independent contracting, to t
AB 5, passed in 2019, was always fundamentally aimed at ridehailing companies like Uber and Lyft. Taxi companies didn’t like them and unions saw their business model of opening up opportunities for individuals to make easy extra money on the side as a threat.
But AB 5’s sweeping labor restrictions went far beyond Uber and Lyft, disrupting livelihoods for Californians across diverse lines of work, from musicians to journalists to translators.
After AB 5’s passage, truckers swiftly moved to bring the law to court, arguing the law shouldn’t apply to them. Many truckers are independent contractors.
They argued in court that, among other things, the Federal Aviation Administration Authorization Act, preempted state law.
The law declares that states, “may not enact or enforce a law, regulation or other provision having the force and effect of law related to a price, route, or service of any motor carrier...with respect to the transportation of property.”
A district court judge agreed they had a legitimate argument in January 2020, and granted a preliminary injunction.
But then the state attorney general appealed, bringing the matter to the Ninth Circuit, which sided with the state, ruling AB 5 “is a generally applicable labor law.”
Truckers hoped the U.S. Supreme Court could correct this, but the court passed on the case on June 28.
“Gasoline has been poured on the fire that is our ongoing supply chain crisis,” declared the California Trucking Association in response to the denial. “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.
The CTA is now hoping for relief from the governor and the California Legislature, which is obviously a position no private sector entity ever wants to find itself in.
Gov. Gavin Newsom and the Legislature could carve out trucking from AB 5, as they have many other lines of work. While we’d prefer to see AB 5 repealed, carve-outs of major sectors make sense, especially one that’s obviously critically necessary to getting things around.
Of course, the central importance of trucking to the state and national economy is also what cuts against it in a California context. Unions see it as just another opportunity to extract dues.
But, there ought to be greater considerations than what’s in the best interests of unions. The freedom of truckers to decide how they want to work, and the importance of not derailing the U.S. supply chain, should trump union interests.