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Pasadena California Business & Commercial Law Blog

A New Year Brings New Hope to Retailers

Despite untimely obituaries written for brick and mortar stores, your everyday physical stores staved off extinction. Lately, they've also started to pick up some wins over online sellers, as they not only defend their business models but also strike back. As we kick off 2019, these brick and mortars appear to be finding new hope.

FMCSA Determines that California Meal and Rest Break Rules are Preempted

On December 21, 2018, the Federal Motor Carrier Safety Administration (FMCSA) granted petitions submitted by the American Trucking Associations (ATA) and the Specialized Carriers and Rigging Association (SCRA) requesting a determination that the State of California's Meal and Rest Break rules (MRB Rules) are preempted under 49 U.S.C. 31141 as applied to property-carrying commercial motor vehicle (CMV) drivers covered by the FMCSA's Hours of Service (HOS) regulations. Basically, ATA and SCRA argued that the MRB should not apply to commercial truck drivers because federal HOS rules already regulated driver breaks. The extensive public comments filed in response to the petitions and considered by the FMCSA can be found at the regulations.gov website.

The California Trucking Association Files Its Case Against Dynamex

As discussed previously on this blog, the Dynamex Operations West v. Superior Court decision upended California's independent contractor market with a new test for whether a worker will be considered an employee. The new test was particularly problematic for the trucking industry. As such, several cases have arisen to challenge the Dynamex decision. The Western States Trucking Association (WTSA) challenged the case. Additionally, a recent California District Court decision determined federal law pre-empts Dynamex. Of course, there is a still a long way to go before Dynamex's fate is decided.

California District Court Finds Dynamex ABC Test Preempted by FAAAA

Since April 30, 2018, when the California Supreme Court issued its decision in Dynamex Operations West. v. Superior Court, California motor carriers, as well as many other businesses, have been struggling to deal with the unexpected new "ABC test" for deciding who is an independent contractor and who is an employee. Under its problematic B prong, the new Dynamex test requires that for a person to be an independent contractor the work he or she does must be outside the usual course of the hiring entity's business. For a basic motor carrier, it is hard to argue that a truck driver is performing a service outside the usual course of the motor carrier's business. But now, a new Central District Court has found that federal law preempts Dynamex for determining the classification of truck drivers.

California Continues to Pressure the Trucking Industry Nationwide

Backed by many in the trucking industry, the Environmental Protection Agency is planning to implement new limits on commercial truck emissions. The new limits appear to be in response to California pushing ahead with laws of its own.

While the State of California also favors nationwide rules, the trucking industry appears to back the move by the EPA because it could put off even stricter regulations that California might implement. California's role in the process has led to all sides seemingly hoping the EPA would take action.

Is the Trucking Industry Primed for an Uber-Style Overhaul?

Manbang, China's "Uber-for-Trucks" is securing funds to support expansion of its driverless program, and the company has already invested in a Silicon Valley driverless truck start-up. While the company is still establishing itself in China, it's success or failure could be a signal for similar companies in the United States.

The Supreme Court's Revamping of Employee Arbitration Rights Continues

In its last term, the United States Supreme Court began revamping employee arbitration rights, particularly with respect to class actions. With the current term under way, the Supreme Court has cases in front of it that could further alter these rights.

The Court has before it two cases that once again analyze the permissible scope of employer agreements requiring employees to arbitrate actions against their employer. In these cases, the companies are challenging lower court rulings they believe hinder their ability to require arbitration. However, while the Supreme Court's last decision on arbitration rights favored employers, it is not clear whether this trend will continue with these new cases.

New State Law Puts Shipping Customers at Risk

Governor Jerry Brown recently signed SB 1402, which quickly has shippers, particularly larger retailers, facing new levels of potential liability. The bill means retailers will now be held jointly liable when the trucking companies they hire for port drayage services violate state employment laws.

The law comes at a time with ongoing claims by truck drivers alleging they are being misclassified as independent contractors rather than employees. While the legislative findings in the bill seem to target motor carriers that abuse the independent contractor model, nothing in the legislation is limited to such carriers and in fact carriers with employee drivers also are subject to the new legislation.

Uber Picks Up Big Court Win with Help from a Recent Supreme Court Case

When Uber entered the market, it began to revolutionize transportation. However, along the way it has faced obstacles that in many instances have found Uber in court. One major issue it's facing is the claim by drivers that they are improperly treated by Uber as independent contractors rather than employees.

In a current class action on the issue, Uber scored a big win recently with the 9th U.S. Circuit Court of Appeals ruling the class action could not proceed, and the plaintiff-drivers are bound by their arbitration clauses and must proceed with their cases not just in arbitration, but individually as well, rather than as a class. Uber's victory was assisted by the recent U.S. Supreme Court case Epic Systems Court v. Lewis, which found individualized arbitration clauses to be valid.

National Labor Relations Board Looks to Reduce Liability of Some Companies

The National Labor Relations Board (NLRB) announced a renewed effort to limit liability for companies with workers that are not engaged specifically by the company. A new proposed rule would protect companies from lawsuits by persons hired by contractors or franchisees.

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