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(Reuters) - The U.S. Supreme Court on Monday declined to take up a trucking industry group's claims that California's strict worker classification law is preempted by federal regulations governing truckers' working conditions.
The court denied a petition for certiorari by the California Trucking Association, which claimed the 9th U.S. Circuit Court of Appeals' April ruling upholding the law known as AB5 threatens the longstanding "owner-operator" model in which drivers who own their trucks work as independent contractors.
The CTA said AB5 is preempted by the Federal Aviation Administration Authorization Act (FAAAA), which also applies to the trucking industry and bars states from enacting laws that dictate the prices, routes and services offered by motor carriers.
The 9th Circuit said generally applicable laws may have some indirect effects on how companies operate, but fall well within states' powers to regulate employment relationships.
The CTA, which is represented by Mayer Brown and Ogletree, Deakins, Nash, Smoak & Stewart, did not immediately respond to a request for comment.
Nor did the California attorney general's office and the International Brotherhood of Teamsters, which represents many truck drivers and intervened in the case to defend the state law.
AB5 codified a test created by the California Supreme Court in the 2018 case Dynamex Operations West Inc v. Superior Court. The three-pronged "ABC test" says workers are a company's employees if they are under its direct control, engaged in its usual course of business, or do not operate their own independent businesses.
The standard has been heavily criticized by business groups who say it makes it impossible for many companies to hire independent contractors, which can help to contain costs.
The CTA in its lawsuit said AB5 will harm trucking companies by forcing them to purchase and maintain fleets of trucks and provide drivers with meal and rest breaks and other benefits afforded to employees.
U.S. District Judge Roger Benitez in January 2020 granted a preliminary injunction to the CTA, finding that AB5 would affect the services and prices offered by trucking companies and thus was preempted. A month later, Benitez declined to dismiss the CTA's preemption claim.
The state appealed and the 9th Circuit in April reversed, saying the FAAAA was designed to preempt state laws that directly regulate how motor carriers operate and not those that merely increase costs.
The CTA in its August petition for certiorari said AB5's impact on trucking companies is so significant that it ultimately dictates the prices and services they can offer. And truck drivers by definition are engaged in trucking firms' usual course of business, so AB5 precludes them from ever being classified as independent contractors, the group said.
A coalition of trade groups including the U.S. Chamber of Commerce, and the nonprofit Washington Legal Foundation, had urged the Supreme Court to take up the case in amicus briefs filed last month.
The case is California Trucking Association v. Bonta, U.S. Supreme Court, No. 21-194.
For the CTA: Charles Rothfeld of Mayer Brown; Robert Roginson of Ogletree, Deakins, Nash, Smoak & Stewart
For the state: Jose Zelidon-Zepeda of the California Attorney General's office
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