UPLAND – The showdown between the trucking industry and California over a new law that could potentially reclassify millions of gig economy and other independent workers ultimately could end up in the U.S. Supreme Court, a trucking association official said.
California ultimately will lose challenges to the state Supreme Court's decision last year in Dynamex Operations v. Superior Court of Los Angeles and this year's Assembly Bill 5, which codified that decision, Western States Trucking Association Director of Governmental Affairs & Communications Joe Rajkovacz said.
"I fundamentally believe California is messing with something that is solely the purview of the federal government," Rajkovacz said. "California has no respect for federal supremacy, in my opinion."
Rajkovacz believes the ultimate outcome, legally, for the trucking industry will be positive.
"It's just going to take a couple of years of maneuvering through the court system," he said.
The flash point of the circling confrontation between the state of California and what may be encroachment upon federal supremacy in interstate commerce is AB 5, called the "gig worker bill," that followed the Dynamex decision. In Dynamex, California’s Supreme Court said a three-pronged “ABC Test” must be used to determine worker classification in wage-order claims.
Under the ABC Test, someone working for a California employer is presumed to be an employee of that employer and the burden falls to the employer to prove the worker is an independent contractor.
"You're talking about a dramatic change about how goods are delivered in the United States," Rajkovacz said.
Gov. Gavin Newsom signed AB 5 into law in September. The legislation is supposed to go into effect in January.
Litigation began almost immediately and already is reaching high into California's judiciary. On Dec. 3, the state Supreme Court announced it would take up the question about whether its Dynamex decision should be retroactively applied.
Last month, the California Trucking Association (CTA) and two California independent owner-operator truck drivers filed a lawsuit in U.S. District Court for California's Southern District seeking to prevent application of AB 5.
"AB 5 threatens the livelihood of more than 70,000 independent truckers," CTA CEO Shawn Yadon said in a news release issued when the case was filed. "The bill wrongfully restricts their ability to provide services as owner-operators and, therefore, runs afoul of federal law."
Western State had been pursuing its own litigation against Dynamex and AB 5 and had already made it to the appeals level when it decided to get out of CTA's way when the latter filed its case, Rajkovacz said.
"AB 5 was a game changer that needed to be challenged directly," Rajkovacz said.
Western States supports CTA in its litigation, which Rajkovacz believes will not be decided in California.
"The fact of the matter is that there's so much at stake here that no matter who wins or loses, it's getting appealed and it'll get appealed right on up the food chain," he said. "Really, in the end, the only question is will the U.S. Supreme Court accept certiorari."
Rajkovacz noted the U.S. Supreme Court accepts only a small percentage of cases but added the controversy over the Dynamex decision and AB 5 has all the markings that could prompt the nation's highest court to take up the matter.
"One of the more hopeful things is if the Ninth Circuit ultimately goes sideways on this, then you'd already have a conflicting decision, a split between two federal circuits," he said. "That's the number one way that the Supremes pick up the case. You can't have Americans living under two sets of laws based on where they live."
A challenge from the trucking industry could find favorable decision in federal courts, Rajkovacz said.
"Trucking in particular, we believe, has some very specific protections, both constitutionally and under federal law," he said. "It's the federal government's purview to regulate commerce amongst the states."