On January 16, 2020, the United States District Court for the Southern District of California in California Trucking Association, et al. v. Becerra, et al., issued a preliminary injunction that will temporarily prevent the enforcement of Assembly Bill (AB 5) against any motor carrier operating in California. Codifying the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court, 341 P.3d 438 (2015), AB 5 provides a test, commonly known as the “ABC test,” to employers for determining whether to classify a worker as an employee or an independent contractor. (See KYL Alert dated December 12, 2019). Plaintiffs asserted among other things that AB 5 is preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”). The district court seemed to agree, noting that the FAAAA preemption provision is broad and “likely preempts ‘an all or nothing’ state law like AB-5 that categorically prevents motor carriers from exercising their freedom to choose between using independent contractors or employees.” This is a favorable interim ruling for the trucking industry, but the issue will not be definitively resolved until final judgment. Companies from other industries including Uber and Postmates have followed suit in filing challenges to AB 5’s continued viability.

On another note, the United States District Court for the Eastern District of California has not yet ruled on plaintiffs’ motion for a preliminary injunction on Assembly Bill (AB 51). AB 51 prohibits the mandatory arbitration of FEHA or Labor code violations as a condition of employment and was set to take effect January 1, 2020. The temporary restraining order that was issued on December 30, 2019, which enjoins agencies from enforcing AB 51 to the extent that it applies to arbitration agreements covered by the Federal Arbitration Act, will remain in effect until January 31, 2020.

Keesal, Young & Logan Employment Group
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