United States: Federal Court Finds California's New ABC Test Is Not Preempted, Applies To Trucking Industry

As California employers wait to see how the California legislature votes on independent contractor bills after the new ABC test was announced by the California Supreme Court last year, a recent federal case out of the U.S. District Court for the Eastern District of California has received some attention in the transportation industry. Western States Trucking Association v. Schoorl is one of the first cases in which an employer organization challenges the legality of the new ABC test.

In July 2018, the Western States Trucking Association brought an action for injunctive and declaratory relief against the acting director of the California Department of Industrial Relations, Andre Schoorl, on the ground that the "ABC test" adopted by the Supreme Court of California is preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA) and Federal Motor Carrier Safety Regulations, and violates the dormant Commerce Clause of the U.S. Constitution. The International Brotherhood of Teamsters intervened and supported the state of California's argument that the ABC Test for independent contractors should be applied to the trucking industry.

Judge Morrison C. England Jr. decided on March 29, 2019, that the trucking industry, despite possible increased costs and difficulties with hiring independent contractors, was governed by the new test for independent contractors. He found that the FAAAA did not preempt the ABC test for the truckers despite the increased costs of complying for the trucking industry. Further, the court found that the California Supreme Court decision did not conflict with federal commercial vehicle safety regulations. Lastly, the court did not find persuasive the argument that the new ABC test discriminated against in-state and out-of-state residents in the trucking industry. All three of the plaintiff's arguments failed.

It remains to be seen whether the Western States Trucking Association will appeal the decision.

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