22 Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) Seyfarth Shaw LLP | www.seyfarth.com business-to-business exemption.116 Among them is a showing that the business provides services directly to the contracting entity and not to that entity’s customers. There are numerous aspects of the law that are unclear, which makes it difficult for employers to ensure they are in compliance. Further, numerous industry groups continue to lobby the Legislature and promote ballot measures to add additional exemptions, and to challenge the law in the courts. In the coming years, we expect to see additional clarification and refinement of the law from the California Legislature and the courts. D. The Battle Over AB 5 1. California Trucking Ass’n v. Bonta : AB 5 Enforced as to Motor Carriers Legislative adoption of the ABC test sparked a great deal of resistance from employer groups. In California Trucking Ass'n v. Becerra, the California Trucking Association challenged AB 5 and sought a preliminary injunction on the grounds that the law was preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”) and by the Dormant Commerce Clause.117 The California Trucking Association initially succeded in obtaining a preliminary injunction. Becerra relied on a state trial court decision, California v. Cal Cartage Transp. Express, LLC, No. BC689320 (Los Angeles Superior Ct. Jan. 8, 2020), which held that the ABC test effectively prohibits motor carriers from using independent contractors to provide transportation services and thus has a significant, impermissible effect on motor carriers’ “prices, routes, and services” that runs afoul of the FAAAA.118 Shortly thereafter, the State appealed and the Ninth Circuit reversed in California Trucking Ass’n v. Bonta. The Ninth Circuit held that AB 5 had only a tenuous, remote, or peripheral connection to rates, routes, or services and thus was not preempted by FAAAA as applied to motor carriers.119 The Bonta court found that “AB-5 is a generally applicable labor law that impacts the relationship between a motor carrier and its workforce, and does not bind, compel, or otherwise freeze into place a particular price, route, or service of a motor carrier at the level of its customers, it is not preempted by the [FAAAA].”120 As a result, the State of California was not enjoined from enforcing AB 5 “against motor carriers operating in California.”121 The California Trucker’s Association then petitioned the United States Supreme court for certiorari, but the petition was denied.122 116 See Cal. Lab. Code § 2776. 117 433 F. Supp. 3d 1154, 1160 (S.D. Cal. 2020), rev'd sub nom. California Trucking Ass'n v. Bonta, 996 F.3d 644 (9th Cir. 2021). 118 Becerra, 433 F. Supp. 3d at 1166. 119 996 F.3d 644, 658-661 (9th Cir. 2021). 120 Id. at 664. 121 Id. 122 California Trucking Ass'n, Inc. v. Bonta, 142 S. Ct. 2903 (2022).
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