On April 30, 2018, the California Supreme Court upended the state's independent contractor market with its decision in Dynamex Operations West v. Superior Court. The Court's ruling changed the way court's will determine whether a worker is an employee or an independent contractor. The case discards the decades-old test established in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (Borello) and replaces it with a new "ABC Test." We initially discussed the difference between these cases in a May 2018 post.
In response, the Western States Trucking Association (WSTA) has quickly moved to challenge the ruling. It is no surprise the WSTA has moved quickly as many trucking companies operate an independent contract owner-operator model. The Dynamex decision, as it stands, could entirely alter the landscape of the industry.
The WSTA's complaint challenging Dynamex begins by laying out how the trucking industry operates and continues to explain the seismic shift the Dynamex ruling will have on the industry, while also laying out the new ABC Test and its impact. From there, the complaint lays out three attacks against Dynamex. All of the attacks are based on a federal law prohibiting the ABC Test.
First, WSTA argues Dynamex violates the Federal Aviation Administration Authorization Act ("FAAAA"), legislation that also governs motor carriers. Because federal law trumps state law, if the Dynamex ruling violates the FAAAA it is invalid.
Specifically, WSTA argues the FAAAA prohibits California from "enacting or enforcing any law or regulation related to the price, route, or service of a motor carrier." The WSTA argues Dynamex, by essentially eliminating the current model of the trucking business, will inevitably increase prices and limit the services and routes companies can provide. WSTA argues that because the ABC Test directly implicates the price route and service of the motor carrier members of WSTA, the Test violates federal law, the FAAAA, and is therefore invalid.
Second, WSTA argues the ABC Test violates the Commerce Clause in the United States Constitution, wherein Congress has the power to regulate commerce among the several States. As WSTA claims, the trucking industry clearly involves national concern and commerce between the States and the ABC Test discriminates against the interstate commerce of the trucking industry. This is the case because, for example, many trucking routes cross among several states. Essentially, WSTA states that because Congress has the power to regulate the trucking industry as interstate commerce, the ABC Test cannot be enforced to regulate the industry in a manner that discriminates against interstate commerce.
Third, WSTA once again argues the ABC Test violates federal law. In this claim, the WSTA argues it violates regulations put in place by the Federal Motor Carrier Safety Administration ("FMCSA"). These regulations cover issues such as vehicle inspections, routing procedures, leasing of vehicles and many other topics.