Owner-operator truck drivers in California plan protests over AB5

Dive Brief:

  • Truck owner-operators in California are planning protests this week over the Assembly Bill 5 (AB5) signed into law in September by California Governor Gavin Newsom, according to flyers on social media sites and local news reports.
  • Drivers are planning work stoppages and protests, including visits to lawmaker offices, according to KPIX CBS.
  • Representatives for the Ports of Long Beach, Los Angeles and Oakland told Supply Chain Dive they saw no interruption to operations Monday. "Our operations today are normal. It appears that we have not yet seen the impact," a spokesperson for the Port of Long Beach said in an email.

Dive Insight:

"There doesn't seem to be any centralized leadership," Joe Rajkovacz, the director of Governmental Affairs and Communications for the Western States Trucking Association, told Supply Chain Dive in an interview. AB5 in the California legislature would rewrite the state's employment laws to make it harder for employers to classify workers as independent contractors by requiring employers to follow a three-part test to determine contractor eligibility.

It has gained attention due to the impact on the gig economy, including Uber and Lyft drivers. Owner-operator truck drivers often work as contractors and many want to maintain this distinction. To be considered an independent contractor under AB5 the worker would need to "perform work that is outside the usual course of the hiring entity's business," the bill reads.

A truck driver working for a carrier performs the work that is within the company's usual course of business, a violation under AB5. "These owner-operators didn't seem to be paying attention during the time of when the sausage was getting made," Rajkovacz said. "And now that AB5 is law it seems to have gotten people's attention."

Independent truckers are picketing legislative offices around the state to protest #AB5. https://t.co/CtMUgjl0PL

-- chrisshimoda (@chrisshimoda) November 4, 2019

There were 50 people protesting outside of State Senator Bill Monning's office on Monday, according to the Monterey Herald, which described it as a "grassroots effort" with "no affiliation with any association." It is not uncommon for large carriers to face lawsuits from workers who want to be classified as an employee rather than a contractor.

FedEx, NFI and XPO have been accused of misclassification over the last couple of years. "This law is bad because we're going to be forced to be employees when we can grow as a small business," Eduardo Rangel, a truck owner-operator, told KPIX. There are a number of exemptions written into AB5 for jobs like freelance writers or graphic designers.

These protesters say they want a similar exemption that allows them to keep working as contractors. Lawyers across the state have started trying to figure out how owners and operators can keep working even if no exemption is added, Rajkovacz said. Some companies are thinking about separating their brokerage operations from their trucking business, so carriers can deal with the owner-operators through the broker.

This would require brokers to be considered separate from the trucking company, which is something that might have to play out in court, Rajkovacz said. Another solution could be the 'two-check system' where the owner-operator is considered an employee of the carrier, but the carrier has to rent their equipment, resulting in two checks for the driver. Others, though, might just do nothing.

"Cavalierly, there are those that say, 'Oh, do nothing, see what happens,'" Rajkovacz said. "And there probably will be a percentage that respond to AB5 by doing nothing and that's kind of throwing the dice."

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