California’s new gig economy law challenged in court by truck drivers

The California Trucking Association on Tuesday filed a federal lawsuit challenging a new state new that will force businesses to treat more workers as employees entitled to benefits like overtime pay and sick leave.

The new law is based on a 2018 California Supreme Court ruling that set higher standards for when an employer can classify a worker as an independent contractor. It’s scheduled to take effect next year after Gov. Gavin Newsom signed it in September.

The association argues the law will deny many truckers the ability to work as independent drivers in California who can profit from their own vehicles while setting their own schedules.

The bill threatens more than 70,000 truckers’ ability to make a living and violates federal law, the association’s CEO Shawn Yadon said in a written statement.

“Independent truckers are typically experienced drivers who have previously worked as employees and have, by choice, struck out on their own. We should not deprive them of that choice,” he said. “We can protect workers from misclassification without infringing upon independent truckers’ right to make a living in California.”

Supporters of Assembly Bill 5 argue the new law will strengthen workers’ rights by ensuring employers can’t deny them benefits they’ve earned, like minimum wage and paid family leave.

Some professions including lawyers and real estate agents received broad exemptions from the new rules under the law. Truckers did not, although lawmakers delayed implementation for some that provide construction services.

The truckers filed their complaint in the U.S. Southern District Court, challenging both AB 5 and the underlying California Supreme Court ruling known as Dynamex.

“We expect big corporate interests — especially those who have misclassified their workers for years — to take this fight back to the place they know they can delay justice for workers: the courts,” bill author Assemblywoman Lorena Gonzalez, D-San Diego, said in a written statement. “Big trucking conglomerates sued under Dynamex, so it makes sense they would sue about AB 5. We expected as much.”

Gonzalez says the law will force gig-economy companies like ride-share service Uber to reclassify their workers. Uber has said the company will continue to treat its drivers as independent contractors and is prepared to defend that decision in court.

Uber, Lyft and delivery service DoorDash have pledged to spend a combined $90 million on a ballot measure that would preserve their ability to classify workers as independent contractors.

This story was originally published November 12, 2019 at 2:08 PM.