The California Trucking Association’s case against California’s Independent Contract rule (AB5) has taken a big hit.
In April, the U.S. Court of Appeals for the Ninth Circuit ruled 2-1 to remove the current preliminary injunction against AB5. Following that ruling, the Association filed a petition to the U.S. Supreme Court. The Supreme Court, instead of making a decision to hear the case, asked the U.S. Solicitor General to weigh in. After months of silence, the Solicitor General has returned with the conclusion that AB5 would not have a significant impact on prices, routes or services and that further review is unwarranted.
This is not just a California issue. As noted in CTA’s brief to the Supreme Court: AB-5 applies to all drivers while operating in California including those from out-of-state. Accordingly, AB-5 would require all carriers and their drivers to comply with California’s laws for employees. AB-5 therefore would obligate carriers to either — use an employee driver for the entire trip (even if the driver could lawfully operate as an owner-operator in other states) or — incur the expense and delay of transferring the freight to a truck driven by an employee when the freight enters California or to a truck owned by an owner-operator when the freight leaves California. The government makes no attempt to explain how this problem could be addressed.
It is unclear whether or not the Supreme Court will still hear the case or take the advice of the Solicitor General and let the Ninth Circuit’s ruling stand. If the Supreme Court denies review, AB5 will be implemented in the state’s trucking sector immediately. Should the Supreme Court choose to review the case, there is no timeline for completion.
Summer adjournment is at the end of June, but there is no guarantee that the court will make a decision by that time. In that case, a decision would carryover into the next court session which begins in October.