California Truckers Protest AB5 Law Reclassifying Independent Owner-Operators as Employee Drivers

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‘Will likely cause many owner/operators who value the freedom and flexibility of being their own boss to flee the state,’ reports Wall Street Journal.

‘During the pandemic, we were too busy being essential to realize we were about to be screwed by AB5,’ said one anonymous trucker.

Truckers in Los Angeles staged demonstrations earlier this week protesting against California’s AB5 law, which essentially bans independent owner-operators in the state.

Big rig drivers participating in the protest reportedly snarled traffic on Los Angeles’ 110 freeway Wednesday, with other protesters picketing outside Los Angeles ports of entry against the bill they say will drive them out of business.

“During the pandemic, we were too busy being essential to realize we were about to be screwed by AB5,” one trucker who wished not to be identified “for fear of retaliation” said in a statement to trucking site FreightWaves.

The bill was signed into law by Gov. Gavin Newsom (D) back in 2019, however it was blocked from coming into effect following an injunction by the California Trucking Association (CTA) in early 2020.

The CTA petitioned the US Supreme Court to review the law, but the high court declined to hear the case late last month.

More on the legal nuances of the case via

The California Trucking Association (CTA) had petitioned the high court to review the case, asserting AB5 would wreak havoc on the transportation industry. The case was CTA vs. (Rob) Bonta, attorney general for the state of California.

The ruling will impact Uber, Lyft, DoorDash and many smaller operators whose businesses are built on a gig driver model. It will also likely cause many owner/operators who value the freedom and flexibility of being their own boss to flee the state. And it will require any out-of-state carrier moving goods into California to adhere to the “employees only” mandate.

The Supreme Court denied the CTA’s so-called writ of certiorari, essentially ruling in favor of the U.S. Solicitor General. That office had recommended the court not review the decision of the Ninth Circuit Court of Appeals upholding AB5. The high court’s actions removed a lower appellate court injunction that was in place while the case was moving through the process, which held the law in abeyance.

The CTA took issue with the Ninth Circuit’s assertion that AB5’s requirements are easily met and will not impact carriers or owner-operators in the state. The circuit court also ruled AB5 met the Federal Aviation Administration Authorization Act (FA4) and its three-pronged test of the law’s impact on prices, routes and services.

“The injunction is expected to be lifted any day now, according to the Harbor Trucking Association,” reports “Provisions in the bill will prevent independent owner-operator truck drivers from contracting with other trucking companies for services, essentially leaving trucking companies no choice but to use only employee drivers.”

Gordon Reimer, the manager of one Southern California-based trucking company, said 75 owner-operators he hires to move freight from the ports have turned down offers to make them employee drivers, and described Wednesday’s protests as a “clear cry for help.”

“It takes courage to park your truck and take a stand against a state intent on ending your ability to earn a living — California’s AB5 is just that,” Reimer told FreightWaves of the protests.

“Owner-operators are the most difficult segment of the trucking industry to try and organize — it’s like herding cats — because everyone has their own personal gripes,” he added. “The intent of this self-serving piece of legislation is to deprive 70,000-plus small business trucking companies of their ability to earn a living in this state.” 

One trucking company owner told the Wall Street Journal drivers seeking to register as independent businesses could face upwards of $20,000 in insurance costs.

Matt Schrap, chief executive of the Harbor Trucking Association, a trade group for West Coast truckers, said the law will force many drivers to choose between becoming employees of trucking firms or registering as independent businesses and working with freight brokers to secure loads.

Mr. Schrap said independent truckers are facing additional costs of $20,000 or more, mostly in the form of increased insurance premiums.

Implementation of the law would come as the nation struggles to deal with a supply chain crisis of the Biden Administration’s own making, and adds complications for truckers already having to navigate new emissions regulations slated to take effect in January 2023.

The protests are set to expand to other port cities in California, with one three-day protest planned in Oakland this Monday.

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