Another Calif court opinion says A B 5 should apply to trucking overdriveonline.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from overdriveonline.com Daily Mail and Mail on Sunday newspapers.
Second California court rules key federal law doesn’t preempt AB5
Trucking sector awaits federal appellate court rule on keeping its injunction but if it goes, state precedents won’t block the law on independent contractors Photo: Jim Allen/FreightWaves
There is now a second state court decision in California ruling that a federal law known as F4A would not preclude the state’s AB5 law from setting the definition of independent contractors.
The ruling has no immediate impact. The federal injunction handed down in early 2020 that blocked implementation of AB 5 in the state’s trucking sector, because of F4A, remains in place and supersedes any state court decisions.
If AB5 comes to California trucking, there may be a way out: the B2B exception
Law is part of AB5 but what’s needed to meet its 13-point list of standards is not easy Photo: Jim Allen/FreightWaves
It has now been almost six months to the day since a three-judge appellate court heard arguments about whether an injunction that has kept California’s AB5 independent contractor law out of the state’s trucking industry should be overturned.
Soon after the arguments were made, the Scopelitis law firm suggested in an email that at least two of the judges appeared to be leaning toward overturning the injunction. If that were to happen, it would presumably be based on the idea that a federal law, the Federal Aviation Administration Authorization Act, did not actually preclude AB5 from governing independent contractor relationships in the state. It was a lower court interpretation that the so-called F4A law superseded AB5 that has kept it out of the state’s trucking sector.
In November 2020, a California state appeals court ruled in
People of the State of California v. Superior Court of Los Angeles County and Cal Cartage Transportation Express, LLC that the Federal Aviation Administration Authorization Act (“FAAAA”)
does not preempt application of “ABC” test set forth in California Assembly Bill 5 (“AB 5”) as to truck drivers. In reaching this holding, the California Court of Appeals, Second District, stated that the “ABC test is a law of general application,” and AB 5 “does not mandate the use of employees for any business or hiring entity.” The state appeals court in
Cal Cartage concluded that AB 5 does not amount to a ban of independent contractors in the trucking industry. The appeals court based this conclusion on ways in which companies can purportedly thread the needle such as the business-to-business exemption, despite the fact that, in practice, it is quite difficult for trucking companies to classify truckers as ind
Semprini v. Wedbush Securities., Inc., 57 Cal. App. 5th 246 (2020)
Summary:
A compensation plan based solely on commissions, with recoverable advances on future commissions, does not qualify as “salary” for purposes of administrative exemption under California law.
Read our in-depth analysis HERE.
Brown v. TGS Management Co., 57 Cal. App. 5th 303 (2020)
Summary:
Broad confidentiality provisions in an employment agreement that effectively prevent an employee from practicing his profession in perpetuity constitute a de facto noncompete agreement in violation of California Business and Professions Code section 16600.
Facts: Plaintiff Richard Hale Brown, a former employee of Defendant TGS Management Company, a securities trading firm, challenged in arbitration the validity of numerous provisions in his employment agreement restricting his right to compete with Defendant. These provisions included a two-year ban on “Directly Competitive Activity” and requirements that Pla