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In a previous post, we talked about California shifting gears to the so-called “ABC test” for determining whether a worker is an employee or independent contractor in a law called “AB-5.” Compared to California’s previous standard, the ABC test classifies far more workers as employees. However, a provision in AB-5 says that where the ABC test can’t be applied in a particular context—because a court says so—California’s former “
Borello” standard kicks back in.
Perturbed by the Golden State’s maneuver, the California Trucking Association—an industry group representing motor carriers that hire independent owner-operator truckers—challenged AB-5, arguing the new test can’t be applied to its carriers because a federal deregulation statute—the Federal Aviation Administration Authorization Act (FAAAA)—expressly preempts state laws “related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.” A district judge agreed and tapped the brakes on applying AB-5 to CTA’s truckers, but last week the Ninth Circuit reversed in a 2-1 split decision. The case is