The state of California is expected to reinstate enforcement of AB5 on independent truck drivers after the U.S. Supreme Court declined to grant certiorari in California Trucking Association v. Bonta, raising concerns about impacts on the supply chain and rising costs here and nationwide.
With the SCOTUS decision not to review the case, the preliminary injunction is expected to be lifted at any moment, Chris Shimoda, CTA Senior Vice President, Government Affairs, told the Northern California Record by email.
“The Ninth Circuit transmitted its order to the district court last week, but we have yet to be notified that the injunction has lifted,” Shimoda said. “In any event, lifting of the injunction is imminent which will then mean that the State of California can enforce AB5 in the trucking industry.”
A preliminary injunction has been in place for more than two years, after the CTA sought exemption from AB 5, the state law requiring classification of independent contractors as employees.
But without the injunction, Shimoda noted at least 70,000 drivers are impacted if not more.
“The vast majority of California’s independent truckers were not asking for a change in the law which would result in being forced to become an employee or move out of state to preserve their independence,” Shimoda said. “These owner-operators are facing some very tough decisions.”
The impact on the supply chain will be negative, Shimoda said.
“We are in peak season for ag harvest, construction, and approaching peak season for holiday imports,” Shimoda said. “All of these areas rely on independent truckers to meet demands. Given the existing challenges in the supply chain, you can expect things to get worse. We’ll have to wait and see how much worse.”
Independent truckers make up somewhere between one-quarter to one-third of the trucks on the road, Shimoda said.
“We believe it’s possible to protect against abusive labor practices while not totally eliminating independent truckers,” Shimoda said. “To avoid worsening the supply chain crisis, inflation and preserving a path for working class entrepreneurs, compromise is needed.”
Gov. Gavin Newsom was on vacation last week in Montana, where he faced criticism for traveling to a state where California prohibits official state travel.
Assembly Republicans have sent a letter to the governor, calling on him to lift AB5 restrictions on the trucking industry.