Judge Tosses Trucking Group’s Challenge to California Labor Reclassification Law

LOS ANGELES (CN) — A lawsuit by a regional truckers association challenging California’s sweeping labor classification law was dismissed Monday by a federal judge in Los Angeles who said in a tentative ruling the group’s claims were not ripe. 

Western States Trucking Association, or WSTA, said in its federal complaint filed in December 2019 that California’s Assembly Bill 5 included three provisions that are preempted by federal law and unfairly target trucking companies that provide services to construction projects as subcontractors. 

The sweeping bill requires companies to classify their workers as employees entitled to minimum wage and overtime — rather than as independent contractors — after an employment status test laid out in the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court.

In its complaint, WSTA claimed the bill should have exempted the industry because the Federal Aviation Administration Authorization Act bars states from regulating routes, services and prices from those companies.

“Because the law mandates that construction trucking companies can never subcontract with other companies, the law will dramatically impact the prices, routes, and services that motor carriers can provide,” the complaint said, adding that the industry’s practice provided much needed flexibility to construction operations.

The California Justice Department and attorneys for the International Brotherhood of Teamsters  filed separate motions to dismiss the complaint on grounds the federal law does not preempt the bill’s provisions, the pre-enforcement claim was not ripe and that the industry group lacked associational standing to sue.

The association’s claims are illusory since they rely on a misinterpretation of the three AB 5 provisions, attorneys for the teamsters said in court documents, adding that the group failed to show any of its members would be harmed by the law. 

Threatened enforcement of AB 5 could lead a misclassified worker to file a wage or misclassification lawsuit against WSTA, attorneys for the group said in court papers rejecting the ripeness challenge. 

U.S. District Judge Christina A. Snyder, a Bill Clinton appointee, sided with California, writing in a 13-page unsigned tentative ruling Monday that WSTA’s claims do not constitute a constitutionally ripe controversy since the state agreed the bill’s provisions do not apply to the association’s members. 

The association failed to show any misclassified subcontractor had taken action under AB 5 to change their status and failed to show any federal regulator had challenged the bill, Snyder wrote in the order.

“These facts and allegations demonstrate the opposite of an actionable threat of prosecution under the challenged provisions, and are insufficient to invoke this court’s jurisdiction,” the ruling states.

But WSTA has standing to sue since the court must accept the group believed the bill would harm its members, provided the harms are “sufficiently imminent,” the ruling states.

Snyder denied as moot the state and IBT’s bid to toss the complaint on grounds it failed to state a claim.

Andrew Kushner, an attorney for the teamsters, said in a statement the WSTA did not argue against Snyder’s tentative ruling at a hearing Monday in LA.

“The court’s tentative ruling that WSTA’s claims were not ripe was well reasoned and WSTA made no arguments that should cause the court to deviate from its tentative decision dismissing the complaint,” said Kushner.

A California Department of Justice spokesperson said in an email "our office is pleased with the ruling. The California Department of Justice has and will continue to defend laws that are designed to protect workers and ensure fair labor and business practices."

But Joe Rajkovacz, director of governmental affairs and communication for the WSTA, said the group views the ruling as a victory — and the fight will continue if need be.

“The state is admitting they’re not going to enforce this language to our members. The minute they enforce this on our members we’ll be back in federal court,” Kajkovacz said by phone. “They’re attempting to defend something we find pretty abhorrent, to tell you the truth.”

Snyder issued a formal written ruling Tuesday.

More than 1,000 construction-related trucking companies employing nearly 5,000 crew members who haul materials to construction sites are represented by WSTA, according to court papers.

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