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July 2022 President’s Column

President's Comments
By: Steve Weitekamp

 



The issue on the mind of many movers around the country is what will be the impact of the latest news on litigation related to AB 5 (Gonzalez). The news, is that the United States Supreme Court refused to hear the issue of CTA v Bonta (described in this issue’s cover article). Anytime CMSA or its staff discusses this issue it is important to note: THE CALIFORNIA MOVING AND STORAGE ASSOCIATION (CMSA) IS A NON-PROFIT TRADE ASSOCIATION THAT DOES NOT DISPENSE LEGAL ADVICE. ANY IDEAS, CONCEPTS, OR THEORIES THAT ARE DISCUSSED SHOULD BE REVIEWED BY YOUR OWN LEGAL COUNSEL. AB 5, RELATED TO MOVERS, IS UNTESTED LAW AND YOUR OWN CIRCUMSTANCES MAY PLAY A ROLE IN POTENTIAL OUTCOMES.

We must also remain alert to the possibility that some information, from any source, related to this complex and specialized area of the law may be erroneous.

Let’s review a brief layman’s history.
AB 5 (Gonzalez) was the California Legislatures’ codification of the Dynamex court decision.

CTA v. Bonta was the case that the industry filed in federal court stating that AB 5 based regulations, effective January 1, 2020. One of the arguments was that the new regulations should not apply to federally defined motor carriers (not applicable to intrastate movers). The trial court initially excluded this class from their upcoming trial. California Attorney General Bonta appealed that action, and the appellate court agreed with the state that motor carriers should not be excluded from the trial. The California Trucking Association asked the US Supreme Court to hear their arguments. On June 30, 2022, the Supreme Court stated that they would not hear the case and kicked it back to the original court, therefore not excluding federally defined motor carriers from the case. The original trial is still pending.

One of the questions we get is why we haven’t done something similar to Uber and Lyft to exempt movers from AB 5? The challenge is, that Uber and Lyft are publicly traded companies and spent ~ $200 million on a ballot measure that excluded them from regulation. The irony of the matter is that the excesses of the gig economy were the impetus for AB 5 (Gonzalez) in the first place! Our read is that this is not something that might be helpful to our industry as currently constituted. The outcome of their proposition resulted in the code section below.
CA Bus & Prof Code § 7451 (2020)

Protecting Independence. Notwithstanding any other provision of law, including, but not limited to, the Labor Code, the Unemployment Insurance Code, and any orders, regulations, or opinions of the Department of Industrial Relations or any board, division, or commission within the Department of Industrial Relations, an app-based driver is an independent contractor and not an employee or agent with respect to the app-based driver’s relationship with a network company if the following conditions are met:

  1. The network company does not unilaterally prescribe specific dates, times of day, or a minimum number of hours during which the app-based driver must be logged into the network company’s online-enabled application or platform.
  2. The network company does not require the app-based driver to accept any specific rideshare service or delivery service request as a condition of maintaining access to the network company’s online-enabled application or platform.
  3. The network company does not restrict the app-based driver from performing rideshare services or delivery services through other network companies except during engaged time.
  4. The network company does not restrict the app-based driver from working in any other lawful occupation or business.

  5. (Added November 3, 2020, by initiative Proposition 22, Sec. 1. Effective December 16, 2020.)

The Clean-up bill to AB 5, AB 2257 (Gonzalez) in the 2020 session includes a business-to-business exemption to AB 5 (on pages 14 & 16 of this issue). CMSA was a party involved in the negotiation related to this section.

 

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