California Trucking Association Suspends Its AB 5 Legal Challenge

After four-and-a-half years of litigation, the California Trucking Association (CTA) has discontinued its efforts to have Assembly Bill 5 (AB 5) overturned in court. AB 5 is California state legislation which adopted the “ABC” test to determine employee classification.

The “B” prong of that test asks whether a worker “performs work that is outside the usual course of the hiring entity’s business.” For owner-operators in the trucking industry, that “B” prong usually classifies O/Os as employees, because driving a truck is part of an overlying motor carrier’s business.

CTA’s litigation effort has had its victories and losses, but now courts have ruled against CTA’s core legal arguments. The Owner-Operator Independent Drivers Association (OOIDA), which joined CTA in this legal battle, has vowed to continue the litigation.

Adopted by the California legislature in 2019, AB 5 became effective in 2020 but the state has yet to conduct any enforcement against California trucking. During the 2020 election, California voters adopted Proposition 22, which prohibited the state from enforcing AB 5 against workers in the gig economy.