The Owner-Operator Independent Drivers Association (OOIDA) is continuing its legal battle against California’s AB5 independent contractor law, arguing that the law will devastate leased truck drivers and raise significant Commerce Clause issues. In the latest appeal to the U.S. Court of Appeals for the 9th Circuit, OOIDA challenges the enforcement of AB5 in California’s trucking sector, specifically highlighting the Business-to-Business (B2B) exemption as a critical flaw.
AB5, which was implemented in California’s trucking industry after a long legal struggle, sets stringent standards for classifying workers as independent contractors, using the ABC test. The “B” prong of this test, which requires that the work performed be outside the usual course of the hiring entity’s business, is particularly problematic for leased owner-operators, making it nearly impossible for them to continue operating under this model in California.
OOIDA’s argument centers on the Dormant Commerce Clause, which prohibits states from passing legislation that discriminates against or excessively burdens interstate commerce. OOIDA contends that the B2B exemption, which allows some independent contractors to maintain their status if they meet all 12 stringent criteria, unfairly targets interstate trucking operations. The association claims this exemption conflicts with federal leasing laws, which require motor carriers to have exclusive control over the equipment they lease from owner-operators, making it impossible for these drivers to qualify under AB5’s criteria.
Furthermore, OOIDA argues that AB5 violates the Equal Protection Clause by treating interstate and intrastate truckers differently without a rational basis, thereby imposing an excessive burden on interstate commerce that outweighs any purported benefits to the state. The brief also challenges the idea that AB5 significantly advances workers’ rights beyond the pre-existing Borello standard, which already leaned towards classifying workers as employees.
If enforced, OOIDA warns that AB5 would effectively eliminate the small businesses of leased owner-operators in California, forcing them either to obtain federal motor carrier authority—an often unattainable and complex process—or to cease operations entirely. The organization calls for the appellate court to overturn the lower court’s decision, arguing that the law’s application to trucking offers minimal benefits while imposing severe economic burdens. Further briefs from the California Trucking Association (CTA) and the state’s Attorney General office are expected soon as this contentious legal battle continues.
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