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In a Win for the Gig Economy, California Judge Exempts Truckers From Problematic Assembly Bill 5

The new law seeks to reclassify contractors as employees.

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A judge has ruled that truck drivers in California are not subject to Assembly Bill 5 (AB 5), a new gig economy law that seeks to reclassify many contractors as employees. 

The regulations, which went into effect January 1 of this year, were drafted in response to Dynamex Operations West, Inc. v. Superior Court of Los Angeles. Filed by Los Angeles City Attorney Mike Feuer, the landmark court case established a three-pronged "ABC test" to determine if an individual is properly labeled as an employee versus a contractor: a contractor must control their workload, not perform work within the business's primary scope of operations, and be "customarily engaged" in the occupation. Companies are trying their level best to circumvent that standard, which would unravel large portions of the gig economy. 

Enter Judge William Highberger of the Los Angeles Superior Court. Highberger did not find that truckers specifically pass the ABC test, but that the test itself "clearly run[s] afoul" of federal law. He cites the 1994 Federal Aviation Administration Authorization Act, which stipulates that the "use of non-employee independent contractors (commonly known in the trucking industry as 'owner-operators') should apply in all 50 states to increase competition and reduce the cost of trucking services."

Feuer plans to appeal the decision, according to The Los Angeles Times.

Businesses in other industries, though, must still deal with blowback from the law, which has caused issues across the state. Uber and Lyft have a pending lawsuit against the legislation, arguing that their contractors pass the ABC test. Freelance workers—from journalists to translators and digital content creators to transcribers—find themselves especially hamstrung by the new regulations, which prohibit any person from submitting more than 35 assignments in a year to the same company or publication if the outfit does not hire them on as an employee. 

Although the law is in its early stages, companies have already decided not to hire freelancers but to instead end their contracts. Vox Media, for example, which hosts the site SB Nation, laid off 200 California freelancers at the start of the year, telling them that the working relationship would become financially untenable. The company will replace those contractors with 20 part-time and full-time positions. Several other companies, such as Rev and Scripted, have also severed ties with their California freelancers and will instead opt to work with contractors who live outside the state.

"These were never good jobs," Assemblywoman and AB 5 author Lorena Gonzalez (D–San Diego) said earlier this month. "No one has ever suggested that, even freelancers."

Freelance workers seem to disagree, however. Alisha Grauso, an entertainment journalist who identifies as a progressive, told Reason that the bill hurts the vulnerable groups it wants to help. 

"The reality is it still falls primarily on women to be the caretakers and caregivers of their families, and freelancing allows women to be stay-at-home mothers or to care for an aging parent," Grauso notes. "Being made employees kills their flexibility and ability to be home when needed. I cannot stress enough how anti-women this bill is."

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  1. The only did it because the Rubber Duck was about to put the hammer down.

    1. Only because they were a mile out of Shakeytown

      1. +1 Dirty Lyle

  2. He cites the 1994 Federal Aviation Administration Authorization Act

    Trucks don’t have wings, so I expect the courts will rule against them.

    1. Apparently Fedex trucks do.
      Fedex is classified as an airline.
      Makes it harder for a union to organize them.

      1. Weren’t they forced to spin of FedEx Ground because it wasn’t airliney enough?

        1. All the FedEx trucks you see doing end point delivery: all subcontractors

    2. Nope
      Federal Aviation and Administration Authorization Act (FAAA) of 1994. That law contains a preemption clause that prohibits states from enacting laws “related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.”

      1. So since Uber & Lyft etc transport people they lose?
        But sometimes they transport food, so then again – – – – –

  3. “These were never good jobs,” Assemblywoman and AB 5 author Lorena Gonzalez (D–San Diego) said earlier this month. “No one has ever suggested that, even freelancers.”

    Freelance workers seem to disagree, however.

    Who are you going to believe? The freelancers affected by the law, or your own lying politicians?

    1. Obviously these jobs were even worse than publicly known, since the employees were so thoroughly brain-washed. Capitalism is even more despicable than we had suspected in our worst nightmares

    2. I’ve known several freelance truckers. Seemed to work pretty well for them. Long hours, but long breaks too. Some people are suited for that kind of work.

  4. In a Win for the Gig Economy, California Judge Exempts Truckers From Problematic Assembly Bill 5

    This headline needs to be re-written with “In a Win for Truckers…”

    Exempting one of the intended subgroups of groups affected by AB5, this isn’t a win for the gig economy… it’s a win for a group that had the most effective lobbyists. AB5 still stands for everyone else.

    1. Nobody mentions that some of these truckers are women, and have children to support. This is clearly a win for mother truckers.

        1. Truck U. A great name for a driving school, although, I suppose someone has thought of it already.

      1. Back in the sixties, there was a “hippie van” in the neighborhood very nicely painted up like a delivery van. The elaborately lettered business name was “Those Good for Nothing Mother Truckers”.

    2. It’s a win for some of the gig economy, which makes it a win for the gig economy.

      If your broken toe is healed, that’s a win for you, even if your ribs and broken arms are still not healed.

      1. If only the Uber and Vox writer were physically attached to the truckers and sharing a common nervous system and blood supply to make that analogy apt.

        1. If gig worker Bob wins, and it does not affect gig worker Sue, gig workers in general are still better off.

          1. Not if it mitigates the pain felt from the law by the general public and politicians, allowing the law to exist longer

    3. Hoffa performs a miracle from the grave.

      1. From the grave?

        Hoffa is hanging with Osama Bin Laden on Plum Island.

        You never know when you need these kind of guys to get everyone marching the Goosestep.

    4. It’s actually bad for the gig economy, because now some of the people that would otherwise hate the law and want it overturned are exempt and will be fine with the law.

      1. That’s crappy thinking. It’s been labeled “worse is better”. Like you want to throw truckers under the bus just for the chance it might make things better at some time in the future for everybody if they get out and work for that.

        You’d probably throw bus drivers under the truck.

    5. Actually a federal court already blocked this law against truckers prior to the state court ruling for the same reason because it is preempted by federal law. This has nothing to do with lobbyists or carve outs. It is a matter of interstate commerce that the state of California has no jurisdiction over. Something their lawyers should have advised them of.
      https://www.freightwaves.com/news/breaking-federal-judge-temporarily-blocks-ab5-enforcement-in-california
      The entire law is bullshit and reveals to the world that the California legislature hasn’t even the most elementary understanding of basic economics. If they want to destroy their own economy fuck them but go ahead. But they don’t get to impose their will on other states rights to commerce.

      1. “…The entire law is bullshit and reveals to the world that the California legislature hasn’t even the most elementary understanding of basic economics…”

        Pretty sure it was put together by the head of a union in San Diego; now you know the impetus and also why the CA legislature passed it.

    6. Binion is a moron.

      Even by B-Team standards

  5. Freelance workers seem to disagree, however. Alisha Grauso, an entertainment journalist who identifies as a progressive, told Reason that the bill hurts the vulnerable groups it wants to help.

    Should I start a countdown for his red-pilling or should I wait?

  6. For the honest supporters of this bill, what do they think will happen? That gig employers will say, “oh, crap, guess we have to give up a tiny fraction of our gazillion dollar pRoFitZ and pay $15/hr with full benefits!!!” Do they not realize that the alternative is that the positions mostly vanish?

    1. Correct, they do not realize that. Statists everywhere are like Pharaoh: “So let it be written, so let it be done.” All it takes to change anything is pass a law. Side effects, unintended consequences, none of that matters.

      1. I don’t understand it at all. I know a lot of otherwise very intelligent people who seem to fall into this way of thinking. How can one seriously think that wealth can be created by fiat?

        1. Like, um I don’t know …currency?

          1. Currency is not wealth. If you create money by fiat, the money becomes less valuable, and buy less stuff. Wealth is the stuff.

            1. Yes. Currency is only useful for the stuff it can buy. Same with exports. They are only useful for the imports they enable you to buy.

          2. Money isn’t wealth. Money is just paper (or metal). The more of it you put into circulation the less each bit is worth.

            1. Wealth is the stuff you can buy. A million dollars is just a heavy pallet of bad-tasting paper.

        2. I can only conclude that you are incredibly unaware of politics in general.

          Listen to any politician, from dog catcher to school board to governor to president. They all tell you that their solutions will literally work miracles, in that they fly in the face of ordinary economics. Minimum wage, price controls, tariffs are not taxes but will be paid by the shippers, peace is war, contraband laws work.

          How many more examples do you need? Politicians refuse to consider any effects of their actions, whether fairy tales, sea stories, unintended, or non-existent.

    2. Oh, I know.
      Just takes waaayyyy tooo much effort to supervise employees and manage costs while maintaining a cost competitive business.
      Better just to hire cheap.

      1. It’s not only about that. It’s about having all the other restrictions of employment: a fixed wage, benefits, etc. And many gig workers don’t want that either: they want a flexible schedule. Why do you deny them a flexible schedule?

        1. Because he’s a nanny statist and knows what’s best for them, better than they do themselves.

      2. If you’re hiring cheap then you need *more* effort to supervise employees – those at the lower end of the economic ladder are not all self-starters with initiative.

      3. “Oh, I know.
        Just takes waaayyyy tooo much effort to supervise employees and manage costs while maintaining a cost competitive business.
        Better just to hire cheap.”

        Need help with that strawman?

    3. Or the employees end up with a worse deal.
      I think they sort of imagine every business turning into some sort of extension of the welfare state. A first step in that is to make everyone an employee dependent on and politically supportive of all of the mandated benefits and pay requirements. Then if jobs are lost they can blame the employers and tax them more to pay for welfare for all the unemployed. What could possibly go wrong.

      Having a W2 kind of job with benefits can be nice and secure, but I can think of lots of reasons why people would want to be independent contractors, even in situations where straight employment would also work.

      1. “Having a W2 kind of job with benefits can be nice and secure, but I can think of lots of reasons why people would want to be independent contractors, even in situations where straight employment would also work.”

        Well, I was working as a contractor in several companies that ran into “temporary financial difficulties”, and they laid off a lot of employees. I was still there because I had a contract. No job is secure (OK, maybe cops and politicians). As I often explained to employees, the only difference is that with employees they say “I’m sorry” before they kick them to the curb. With contractors they just say “we aren’t renewing your contract”.

    4. “Do they not realize that the alternative is that the positions mostly vanish? ”

      Or they are outsourced via this great thing called the internet.

      I actually contracted for a small digital agency a few years ago, here in KC where I live, and they would get a ton of clients from the coast. I’m sure because it’s cheaper without having to deal with non-native English speakers. And now since CA decided they don’t want freelance workers anymore, that outsourcing is going to explode. It’s a good time to be a web designer in the midwest.

  7. Can we stop with the judiciary tests for carve outs? If the law is bay written kill it. If it has unintended consequences, let the politicians suffer until they fix it.

    1. The law as written has carve outs for white collar professions, lawyers, doctors, accountants, Realtors etc. It is aimed exclusively at what the legislature considers blue collar professions that their union masters want to conscript into their racket. In the case of interstate trucking they’ve found out they are imposing a law outside of their jurisdiction, something they should have known. I don’t know what other professions can make that case. Ultimately they will make their case politically or GTFO.

      1. That’s what I want to happen. Politicians forced to fix their own shit, not the courts with special tests. I’d like to see a judiciary that pivots to striking down laws first instead of rewriting.

  8. In a Win for the Gig Economy, California Judge Exempts Truckers From Problematic Assembly Bill 5

    Now if they could just get off of that L.A. Freeway….

    1. “Without getting killed or caught….”

  9. A judge has ruled that truck drivers in California are not subject to Assembly Bill 5 (AB 5),

    especially after they’re replaced by autonomous vehicles.

  10. Great idea.
    Let’s re-classify every state, local, and federal government employee as a contractor so the taxpayers aren’t on the hook for their health insurance and pensions.
    We need a larger field in this race to the bottom.

    1. Good start but it doesn’t go far enough. What’s needed is to fire them and then we’re not on the hook for their salaries, either.

    2. That right there? That’s funny. I don’t care who you are.

      Oh, and the majority of people doing work like these Uber drivers wouldn’t get health insurance and pensions as employees either.

      1. Employer-provided health insurance is a tax dodge created during the Great Depression when wage freezes were put in place.

      2. It ties workers to a company – they no longer have the freedom to move between jobs that they would if they had their own health insurance. This could be fixed simply by making the tax break companies get for providing insurance a personal exemption.

      3. Pensions are deferred payments. Everyone gets a pension – some people just have to wait until their 62 to get the money. The rest of us get it in each paycheck.

      1. Employer provided healthcare is also what fd up the market

  11. In other news…

    “It is with broken hearts and the deepest sadness that we must share the terrible news that on Tuesday our friend, soul brother and band mate of over 45 years, Neil, has lost his incredibly brave three and a half year battle with brain cancer (Glioblastoma). We ask that friends, fans, and media alike understandably respect the family’s need for privacy and peace at this extremely painful and difficult time. Those wishing to express their condolences can choose a cancer research group or charity of their choice and make a donation in Neil Peart’s name. Rest in peace brother. Neil Peart September 12, 1952 – January 7, 2020”

    https://www.rush.com/neil-peart-2/

    1. Damn. Another one bites the dust. RIP Neil.

    2. Well, crap. Sad to hear that.

    3. Damn. He had a rough later life. Didn’t realize he’d been sick.

  12. I still don’t see why Vox which is headquartered in NYC has to follow a California law. I guess a freelancer could get in trouble if they submitted 36 articles but what can they do to Vox?

  13. In a Win for the Gig Economy,

    Its not a win. Its the usual ‘we’ll give you special exemption if you lobby hard enough’ game.

  14. I should be happy for California, but I’m not. I want that state to be allowed to pass as many pro-labor laws as it can, unhampered. This will serve three purposes:

    1. Discourage business creation and expansion in that state.

    2. Raise the cost of living further in that state (which is what labor laws do for anyone who’s not the direct beneficiary of them), driving out residents, who will hopefully be mostly conservative to states where their vote has more weight.

    3. Serve as a clear-cut and unambiguous example of what socialist policies do to a place that we can all point to during nationwide debates. More ammunition for us, in other words.

    So judges and feds, please stay out of it. And let California be the Commiefornia it aspires to be. It deserves it.

    1. And don’t give me that “you’re rooting for your countrymen to lose.” I’m a born-freedom lover, so socialists are my natural-born enemies. So of course I’ll be rooting for them to lose.

      Now, if there’s a foreign threat, I’ll be siding with countrymen obviously. Supposing the threat is even more oppressive and tyrannical in nature than Cali. But in times of peace, I’ll be on their throats.

    2. The trouble is the California is receiving massive amounts of federal funding, and they are going to be looking for bailouts. They are also politically so powerful that they will keep the money flowing their way.

    3. there’s already plenty of example of this from all over the world, and California is rushing to emulate them. No one is going to learn from this.

  15. In a Win for the Gig Economy, California Judge Exempts Truckers From Problematic Assembly Bill 5

    How is a special exemption for one politically important special interest group a “win for the gig economy”?

  16. In a Win for the Gig Piecework and Day Labor Economy, California Judge Exempts Truckers From Problematic Assembly Bill 5

    1. Sarc or stupidity, Homple?

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