What’s Behind the Supply Chain Back Up?

Almost everyone is aware of the present supply chain back up.  One of the leading causes of this back up is due to a lack of truck drivers.  Recent California law may be now exacerbating this problem.

California truckers utilize thousands of independent contractor drivers, often called owner operators (OOs).  AB 5 (recent California law) limits and may preclude use of OOs by trucking companies.  Most OOs prefer to be treated as contractors, not employees.  If AB 5 forces OOs to be employees many OOs will exit the trucking industry in favor of other types of work adding to the supply chain back up.

In the case of People vs. Cal Cartage, the trucking company alleged that federal law prevented California from applying AB 5 to truck drivers.  The California appellate court denied Cal Cartage’s claim of federal preemption, but the court’s decision included some positive language indicating that AB 5 does not prevent use of OOs by truckers. Cal Cartage sought review of the appellate court decision.  Such review has now been denied by both the California Supreme Court and the United States Supreme Court.

There is another case filed by the California Trucking Industry (CTA) winding its way through the court system that also alleges that AB 5 is preempted by federal law.  The United States District Court ruled that federal law preempts AB5.  However, the Ninth Circuit Court overruled the District Court’s decision and denied CTA’s preemption claims.  This case is now up for review by the United States Supreme Court. Stay tuned! Should you have any questions regarding transportation law, please do not hesitate to our transportation law attorneys.

This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice.  For information on your particular circumstances, please contact Chauvel & Glatt at 650-881-3009 for legal assistance near you. (Photo Credit 123rf.com.)

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