This month there is so much going on that I feel like a mosquito in a nudist’s camp – I don’t know where to begin! Here at NorthAmerican Transportation Association (NTA), our motto is “Helping Others to Succeed in Business” and the way we do this is to try to stay on top of everything that can harm the transportation industry and pass that information on to our members. One way you can stay up to speed, in addition to reading this article in 10-4 Magazine each and every month, is to sign up for our free “Hi-Way Hi-Lites” newsletter on our website (www.ntassoc.com). Now, let’s get down to business.
Over in Oklahoma, John Christner Trucking is up against about 500 individuals who were working there from about May 2015 through May 2018. They all signed up as independent contractors and are now all looking for free money. They are seeking certification of two classes for eight causes of action under California law: failure to pay minimum wage; failure to pay for all hours worked; failure to provide meal and rest breaks; failure to reimburse necessary business expenditures; failure to maintain proper payroll records; failure to provide itemized wage statements; waiting time penalties; and unfair business practices.
There are conflicts between the labor laws of California and Oklahoma, so can you imagine how sticky things are going to get between the drivers who live in California and the ones who live everywhere else. First, they have to figure out if there is any misclassification under the California ABC rule, which currently has a temporary restraining order on it. Then, they have to see what happens under the Borello case requirements, which was the old way to determine misclassification. Next, the Oklahoma Consumer Protection Act comes into play. After that is settled, the Oklahoma Business Opportunity Sales Act comes into play – this case could go on and on until the cows come home.
This has already been going on for two years, and the only people that are really going to benefit are the lawyers. Lawyers always get their share up front, and what is left over is usually a piddly pence for their clients. These 500 individuals simply did not do their due diligence in deciding to become independent contractors, to see what it really takes, and now they want the trucking company to reimburse them for their bad judgment.
Next, let’s talk about the FMCSA Clearinghouse. The first thing I’m going to say, other than the fact that our friends over at the FMCSA did not market this properly, is that we are still finding people that have never heard of this and what it is all about. I’m not going to ruin your day with a lot of regulations, just go to our website (www.ntassoc.com) when you have some time and read it all yourself (you can find it under the “Benefits A-F” tab).
There are two very important points motor carriers must know now. First, it’s going to take longer to hire or utilize a new driver’s services simply because YOU MUST have the drivers consent BEFORE you send him/her to do a pre-employment test. If the person has not done the free Clearinghouse registration, then you’re just going to have to wait. Trust me, even an idiot can get on the computer and see the date when the driver gave his/her consent and the date of when the pre-employment test was done. If you jump the gun, you’re just asking for trouble during an audit.
And speaking of audits, the second thing I want to point out is if you as a motor carrier have not updated your company’s substance abuse policy since about April of 2018, you may have a very serious problem. A little birdie tells me that your policy could be considered null and void – as if you never had a policy at all – if it hasn’t been recently updated, due to all the changes regarding recreational marijuana, opioids, and now the Clearinghouse. I know for a fact that if you had a driver that did not take a random drug test during the allotted time and you were just two days late, the fine was $6,000. So, you can imagine what the fine would be for having no policy at all.
From our legal friends at Scopelitis, Garvin, Light, Hanson & Feary, we learn that two recent decisions have clarified how courts might interpret and analyze California Assembly Bill 5 (AB5). In CTA vs. Becerra, the Southern District of California granted a temporary restraining order on December 31, 2019 enjoining the state from enforcing AB5 as applied to motor carriers. A hearing for a preliminary injunction was held on January 13, and then on January 16 the preliminary injunction was granted, with important references to U.S. Congressional intent to allow for independent contractors and owner operators in trucking.
Concurrently, in California vs. Cal Cartage Transportation Express, LLC, a California Superior Court held that the “B” prong of the ABC test used in AB5 and in the Dynamex court case and decision is preempted by the Federal Aviation Administration Authorization Act (FAAAA). The court recognized that the FAAAA was specifically adopted – at least in part – to limit state rules that act to limit owner operator entry into the industry. The order granting the preliminary injunction in the Becerra case concurs and even defers to the well-reasoned B2B analysis in Judge Highberger’s decision in the Cal Cartage case.
Importantly, the Becerra court also denied the City of Los Angeles’ motion to intervene in the federal case, potentially limiting AB5 proponents’ ability to make overlapping arguments in the two cases. It now appears likely that the issue will make its way to the United States Supreme Court via appeals of the final Becerra decision through the Ninth Circuit. The next steps in that journey occurred on January 29th when the State of California and Teamsters filed their notices of interlocutory appeal to the Ninth Circuit. Of course, it is likely to take months or even years to reach the Supreme Court for consideration, at which time the Supreme Court could decide not to hear the case at all, as it did recently in a case with similar issues.
On the other coast, New Jersey continues to move toward creating a more California-like environment. While New Jersey Senate Bill 4204 failed upon the legislature’s adjournment this week, it was immediately reintroduced as Senate Bill 863 and is poised to continue its high-profile consideration by the Senate. NTA will continue to monitor this legislation, and other legislation, introduced by states attempting to model the changes made to the treatment of independent contractors by AB5. The days of “doing it yourself” are long gone. To stay ahead of all this stuff and stay in business, you simply must join an association. Whether it be the NTA or another, I implore you to reach out and get help!