Federal court rules California’s gig economy law applies to another group of workers
A new California law directing employers to provide benefits to more workers applies to truck drivers, a federal court ruled Wednesday as it overturned a previous decision that had allowed them to operate as independent contractors.
The ruling by the Ninth Circuit Court of Appeals could apply to as many as 70,000 truck drivers in California who continued to work classified as independent contractors after Gov. Gavin Newsom signed the gig economy law known as Assembly Bill 5 in 2019.
“Today’s ruling from the 9th Circuit is a massive victory for California’s truck drivers, who for far too long have faced exploitation and misclassification at the hands of trucking companies that place corporate profit ahead of drivers’ safety and well-being,” the labor union International Brotherhood of Teamsters, which represents some truck drivers, said in a statement.
A 2019 report from the UC Berkeley Labor Center found “significant misclassification problems” in the trucking industry, citing studies suggesting up to 85% of port truck drivers across the country could be misclassified.
Misclassified contract drivers earn thousands of dollars less a year than those working as employees, the report said.
The California Trucking Association sought to fight AB 5 in court, suing California in 2019. The association had said AB 5 threatens the livelihood of independent truckers, some of whom invested hundreds of thousands of dollars in buying clean trucks and enjoyed the right to set their own schedule.
In a statement Wednesday, the association’s CEO, Shawn Yadon, vowed to appeal the new decision.
“The California Trucking Association will take any and all legal steps necessary to continue this fight on behalf of independent owner-operators and motor operators operating in California,” Yadon said.
Newsom signed AB 5 to codify a 2018 California Supreme Court decision that also restricted employers’ use of independent contractors. Gig companies such as Uber and Lyft challenged the law with a ballot initiative called Proposition 22, spending hundreds of millions of dollars on a campaign that exempted them from AB 5.
