A recent federal appeals court decision that found interstate motor carriers are not exempt from AB 5 has prompted questions about what other professions could now receive exemptions from the controversial mandate.
“The message that lawmakers should take from the ruling is that AB 5 was an overly broad law that created many pitfalls that now are having to be litigated on a case-by-case basis,” Vittorio Nastasi, policy analyst with the Reason Foundation, told the Northern California Record. “You have different industries receiving exemptions and others being denied.”
AB 5, which was enacted by Gov. Gavin Newsom in 2019, took effect on Jan. 1, 2020. It imposed restrictions on employers in classifying workers as independent contractors.
“I want to assume everything was well intended, but that only goes so far, because the outcome has just been a confusing mess for workers and employers to navigate,” Nastasi said.
The California Trucking Association (CTA) was granted a preliminary injunction on grounds the Federal Aviation Administration Authorization Act (F4A) exempted motor carriers from the California law.
“Many workers and industries have shown opposition to AB 5,” Nastasi said. “In the case of motor carriers, it would basically upend the business model for large parts of the industry. That could have implications for costs for consumers, it could cause consolidation within the industry.”
Although the district court had ruled in favor of the CTA, the appeals court overturned in a 2-1 decision in April. The CTA’s petition for rehearing en banc was denied on June 21, however, the court granted the CTA motion to stay AB 5 pending petition for review by the U.S. Supreme Court.
“I think the key lesson in the whole AB 5 saga is Legislatures need to be smart and targeted with their approach to regulations,” Nastasi said.
“AB 5 was an irresponsibly written law that was far too broad and sweeping in its effects and rather than pursue targeted reform in places deemed necessary or appropriate, lawmakers sparked an ongoing mess of court battles and piecemeal carveouts that will inevitably leave behind the most disadvantaged workers and those who are unable to effectively sway policy in their favor.”