Ruling targeted by lawsuit signaled the end of working with owner-operators in California.
The Western States Trucking Association has filed suit in the United States Court for the Eastern District of California challenging the ruling by the California Supreme Court that is seen as effectively nulling the ability of trucking companies to use owner-operators in the state.
In the landmark Dynamex Operations West Inc. v. The Superior Court of Los Angeles County decision, the state Supreme Court ruled that certain workers– in particular transportation drivers– should be presumed employees instead of independent contractors when evaluating wage and hour classification in class action cases.
That’s a mouthful, but according to WSTA, the upshot is the ruling signaled the end of working with owner-operators in California. That’s because it requires a company using an independent contractor to ensure their classification is proper under the newly adopted “A-B-C” test, which consists of certifying:
- A That the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact
- B That the worker performs work that is outside the usual course of the hiring entity’s business
- C That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
“Most legal analysis of the ruling agrees the A-B-C test sets an impossible standard for most of our members to meet,” WSTA stated to its members back in May.
According to Rob Moseley, an attorney with Smith Moore Leatherwood, it’s the “B” part that is problematic. “If you’re in the trucking business, it’s going to be a very difficult fight, because the ‘B’ prong of the A-B-C test basically says… the contractor has to be in a different business. They can’t be in your business.”
“Our intention is to nullify the [California] Supreme Court ruling that effectively eliminates the use of owner-operators, even one-truck motor carriers from the trucking marketplace,” Joe Rajkovacz, WSTA’s director of Governmental Affairs & Communications, told HDT on June 19.
“Our desired outcome is an immediate [federal] injunction against California utilizing an A-B-C test to determine employment classification in the trucking industry. Long term, [it should be] that California and its state agencies cannot utilize an A-B-C test in making employment classification decisions in the trucking industry.”
He added that as of now, “Virtually all entities in California utilizing independent contractors are at risk from predatory lawsuits because of the California Supreme Court decision in Dynamex. The trucking industry has unique legal protection under federal law from this type of decision.”
Rajkovacz noted that WSTA is also working with other organizations within the state for a legislative solution. “However, until and if, that can occur the trucking industry needs to be protected from this Supreme Court decision that amounted to legislating from the bench.”