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The Essentials - California Employment Law Update | K&L Gates LLP
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California s AB-5 Applies to Motor Carrier Workers
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For decades, the practice of motor carriers arranging for freight to be transported by independent owner-operators i.e., independent contractors who drive their own trucks has been ubiquitous. However, this practice is now under threat in California because of a recent court decision.
On April 28, 2021, in
CTA v. Bonta”), the United States Court of Appeals for the Ninth Circuit addressed whether the broad preemption language of the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”) precludes enforcement of California’s Assembly Bill 5 (“AB-5”) against motor carriers operating in California. (AB-5 is discussed here.) In a split 2-to-1 decision that may have enormous (adverse) implications for motor carriers operating in California, the Ninth Circuit held that the California Trucking Association (“CTA”) was unlikely to succeed on the merits of its lawsuit challenging AB-5 because it conclu
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April 2021 was a meaningful month for two industries that are hardly strangers to lawsuits involving the status of workers as independent contractors. A federal district court in the District of Columbia issued an extremely favorable decision for Lyft, holding that a driver and members of a class action are not covered by the interstate transportation worker exemption from arbitration under the Federal Arbitration Act, even though drivers in a locality such as D.C. often drive in interstate commerce. The court concluded that the arbitration exemption in the FAA must be determined by reference to all drivers providing services to a company’s customers nationally, not locally, and found that crossing state lines is not commonplace among Lyft drivers in most locations where Lyft operates. Meanwhile, in an appellate decision by a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit, two of the three pan
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