A federal law that prevents states from interfering in certain aspects of motor carriers’ operations will not spare the trucking industry from AB5, following a California appeals court ruling. Several high-profile challenges from motor carrier companies and associations have alleged that the Federal Aviation Administration Authorization Act (FAAA) exempts them from complying with AB5, the California law mandating the test employers must use to classify workers as employees. Federal courts have issued split opinions on whether the federal law usurps the state statute, and the U.S. Court of Appeals for the First Circuit has come down on the side of the trucking industry over a similar employee classification test in Massachusetts. In a 20-page order Thursday, California’s Second District Court of Appeal found that the FAAA does not preempt the state labor law. 

Three motor carrier companies represented by Gibson, Dunn & Crutcher alleged that AB5 will prevent them from using independent contractors and control their rates, routes and services, in violation of the FAAA. However, the court found that the state law’s ABC test—a law of general application that does not mandate how companies use employees—is not the type of law that Congress intended to preempt. “That independent owner-operator truck drivers, as defendants currently use them, may be incorrectly classified, does not mean the ABC test prohibits motor carriers from using independent contractors,” wrote Associate Justice Brian Currey for a panel that included Presiding Justice Nora Manella and Associate Justice Audrey Collins.

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