Ruling Threatens Independent Trucker Business Model In California

Corey Cabral, Partner and Chair of CDF's PAGA Litigation Practice Group, was recently quoted in the article "Ruling Threatens Independent Trucker Business Model In California," by published by SHRM.

Excerpt

"Motor carriers that use independent truck drivers to haul freight in California may need to adopt a new operating model and reclassify drivers as employees if a recent 9th U.S. Circuit Court of Appeals decision stands.

Freight carriers have long contracted with drivers who own and operate their own rigs, but a 2019 California law, AB5, has threatened such arrangements by establishing a three-part test to determine whether workers are employees or independent contractors.

In California Trucking Association v. Bonta, a federal appeals panel ruled 2-1 to uphold California's authority to enforce that test against motor carriers. Legal experts expect motor carriers and independent truckers to appeal the decision.

"If the ruling stands, motor carriers will likely have to rethink how they structure their relationship with drivers," said Kyle Winnick, an attorney with Epstein Becker Green in Newark, N.J. He noted that many motor carriers use independent contractors to move goods, and some owner-operators in turn use their own subcontractors.

Corey Cabral, an attorney with CDF Labor Law, a California-based labor and employment defense law firm, called the case "an issue of exceptional importance" that's likely headed to the U.S. Supreme Court."

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