Call:(949) 436-2785
On April 28, 2021, the Ninth Circuit Court of Appeals in California Trucking Association v. Bonta, issued a decision that California’s AB-5 law, now Labor Code Section 2775, is not preempted by federal law. The three-judge panel ruled that the District Court was wrong when it granted a preliminary injunction that prohibited the application of Labor Code Section 2775 to motor carriers and independent owner operators including those providing services to the Construction Industry.
What does this mean? AB-5 restricts most workers from being independent contractors and with its 3-prong, hard to satisfy test, in California, almost everyone now is an employee. The injunction had basically created an exception for trucking, construction and other industries that rely heavily on Owner/ operators of trucks and other vehicles. Now this means that all those drivers who owned their own trucks and other vehicles and basically operated their own business, would be considered employees.
This decision has been referred to as “disappointing” to many in the transportation industry who have also called it “strained” and “lacking significant analysis”. Unfortunately, the trucking industry will now be faced with legal challenges and difficulties in complying with Labor Code Section 2775.
The decision, if it stands, will have a large impact beyond the trucking industry. Construction is one of those industries that will feel its crunch as well as many other California businesses across many industries that will be impacted with increased driver costs and increases in the cost of owning equipment. Of course, these increased costs will ultimately be passed on to consumers.
One possible solution is for drivers to be paid wages for their driving as employees but also be paid a rental fee for their equipment as business owners. This blended practice used to be common in the trucking industry and could be coming back into practice depending on how subsequent rulings play out. Stay tuned for more updates!
This article is informational only and meant to provide guidance. It is not meant to be legal advice and it does not create an attorney-client relationship. For what to do in your specific situation, please consult with a qualified Construction Law attorney.
June 07, 2023
May 08, 2023
April 26, 2023
March 31, 2023
February 16, 2023
Mahyar was a big part in helping start our company and setting up our corporation. She also went to battle with a Billion dollar Corporation to keep our doors open when they tried everything to shut us down.
In 2008 -2009, our company was involved in a lawsuit with over 1 million dollars claimed against us. Mahyar Ghassemian handled our case expertly and conscientiously. She explained on a regular basis the progress of our case and how each of the actions of our opponent would ultimately affect our case. At no time did we feel alone or compromised as Mahyar boldly stayed her course which eventually provided us with the satisfactory outcome we had hoped to achieve. She will be our first call should the need arise in the future.
Many years ago an insurance carrier hired Mahyar Ghassemian to defend my construction firm in civil litigation. Not only was Ms. Ghassemian very knowledgeable and competent regarding the legal proceedings, but she was also personally vested in our well-being; she cared what happened. She counseled us regarding the various options, listened to our input and proceeded accordingly. In multiple cases with Ms. Ghassemian, we have never experienced a negative outcome. Today my first call when a potential legal issue is on the horizon is to Ms. Ghassemian. She is both extremely effective and cost conscious.
Small Firm Value – Large Firm Expertise