California Trucker Group Files Challenge To Law Restricting Independent Contractors

California Trucker Group Files Challenge To Law Restricting Independent Contractors

As truckers wrestle with a new California law, AB5, that seeks to limit independent contractors, a trucking organization based in the state has filed a new challenge to a sweeping labor law that includes independent truckers.

The California Trucking Association (CTA) filed its legal challenge Nov. 12, stating that more than 70,000 independent truckers will be unable to work under the new law, Chris Shimoda, vice president of government affairs for CTA, told FreightWaves.

Starting Jan. 1, 2020, the Employee and Independent Contractors law, AB5, goes into effect. It stems from the California Supreme Court's decision against Dynamex Operations West Inc., a package and document delivery company.

The court found that Dynamex misclassified delivery drivers as independent contractors rather than employees and that all California-based companies that use independent contractors must use the "ABC test," a three-pronged test to determine whether a worker is an employee.

Trucking companies must prove a worker is free from the control and direction of the hirer in connection with the performance of the work; the worker performs work that is outside the usual course of the hiring entity's business; and the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.

"We're really doing this because we believe the owner-operators have the right to continue their businesses and want to continue to be independent truckers. They don't want to be forced to become company drivers," Shimoda told FreightWaves. "At the core of the trucking industry of this fight is that 80% of our drivers don't have college educations, and so the pathway for them to become entrepreneurs and to become part of the middle and upper-middle class that has been an opportunity is to own multiple trucks and become part of the American dream."

Prior to CTA's recent lawsuit, New Prime Inc. said it was among the recent mega-carriers offering relocation packages to current independent contractors who live in California or said it will convert them to company drivers. The carrier states it isn't seeking to add any new contractors who live in the state under AB5.

"Unfortunately, the net income for the company drivers is notably lower than our independent contractors in California," Steve Crawford, general counsel of New Prime, headquartered in Springfield, Missouri, told FreightWaves.

"AB5 has certainly presented unfortunate issues for our company and our fleet," Crawford said. "Like many others in our peer group, we have obviously ceased affiliating with any new independent contractors that live in the state of California or would run exclusively intrastate."

New Prime is offering a relocation package based on longevity with the carrier to move from California. Crawford said California contractors are being offered $1,000-$5,000 to leave the state and continue working for the carrier.

He admits it isn't a good deal for some drivers who own homes in California.

"If these drivers are homeowners, our relocation package isn't going to be good for them, but if they are just renting an apartment and they have to pay a lease-breakage fee to move out of state, it certainly would be beneficial," Crawford said.

Landstar System of Jacksonville, Florida, is one of the large carriers that recently sent out a letter or contacted its business capacity owners (BCOs) or leased owner-operators based in California, outlining their options regarding AB5.

According to the Landstar letter sent out Nov. 4, its leased owner-operators can move out of state and provide the company with proof of a new driver's license, get their own authority, or deliver a load into California, but they can't pick up a load in the state.

"Due to the uncertain legal environment created by the new law, Landstar will be reaching out to each BCO and operator who has a California-based address on file with Landstar to discuss some options relating to the potential impact of the new law," the letter read. "It will be up to each interested California-based BCO or operator to make its own informed business decisions with respect to how it wishes to react to AB5."

Ivan Mikhov of Sacramento, California, said he loves his job as a leased owner-operator to Landstar. He has worked for the company for nine years and said he will leave the state he has lived in for more than 17 years in order to continue working for Landstar.

"I guess we will relocate because I don't see a way out of this," Mikhov told FreightWaves. "I love working for Landstar because the agents call me directly when they have a load. They know me."

Mikhov, his three kids, dad, brothers and sisters all live in Sacramento. His family moved from Ukraine 17 years ago. However, he said he will sacrifice his close family bond to continue working for Landstar.

"My brother had his own authority for a while, but he came back to Landstar about nine months ago because it's really hard to be on your own right now," he said.

He recently paid off the newer Volvo truck he was forced to buy to comply with emissions regulations implemented by the California Air Resource Board (CARB).

"I really don't see myself doing anything else," Mikhov said.

AB5 is affecting carriers of all sizes, including Landstar, said Joe Rajkovacz, head of government affairs for the Western States Trucking Association (WSTA).

"This is indicative of Landstar arriving at the same conclusion that many other motor carriers not based in California have arrived at recently," Rajkovacz told FreightWaves.

Rajkovacz said out-of-state carriers who lease with California-based owner-operators can't pass the B prong, which is why some mega-carriers are cutting them loose.

"The state of California is trying to superimpose its will on the federal government, but I believe the federal courts may fight this, but it's going to take a few years," Rajkovacz said.

Michael Lotito, co-chair of think tank Littler Workplace Policy Institute, said the disruptions to the California economy "are likely to be massive as a result of AB5."

"AB5 is the most radical reformation of the employer/employee relationship in history," Lotito told FreightWaves.

One Schneider National driver, headquartered in Green Bay, Wisconsin, told FreightWaves Schneider's California-based owner-operators are being called and have been given the options to get their own authority, move out of state or become company drivers.

Another owner-operator living in San Bernardino County, California, said she has received no word from her carrier, Roadrunner Transportation Systems, about the impact AB5 may have on her business, but she fears the worst.

"My husband and I are team drivers, and we make good money leased to Roadrunner," Valerie Lopez told FreightWaves. "We recently bought a house here in California and don't want to move, but there is no way we can make the same money if we have to transfer to a company driver or leave the company."

Read more stories by FreightWaves' Clarissa Hawes

Image Sourced from Pixabay

Posted In: AB5CaliforniaFreightFreightwavesLogisticsSupply ChaintruckingGovernmentNewsRegulationsPoliticsMarketsGeneral

11 Best Black Friday Deals on Amazon

11 Best Black Friday Deals on Amazon

The best Black Friday deals from Amazon are still coming hard and fast because the holiday is not yet upon us and the mega-retailer prefers to keep consumers on the hook for as long as possible—spending as much money as possible. 

To that end, here are some of the best Black Friday deals from Amazon that you might want to consider today.

Calphalon 10-Piece Pots and Pans Set

Regular Price: $172

Sale Price: $138.88

Calphalon’s 10-Piece Pots and Pans Set is designed with stainless steel, stay-cool handles along with pour spouts. The nonstick surface is PFOA-free and built with hard-anodized aluminum that is both durable and conducts heat extremely well. The set includes 2 fry pans, a sauce pan with cover, saute pan with cover and large stock pot with cover.

Apple AirPods 2nd Generation

Regular Price: $144

Sale Price: $85.49

The 2nd Generation AirPods from Apple connect to all Apple devices and give you an enhanced listening experience. Plus, they come with a case that keeps them safe and allows you to charge them in a secure environment. With over 24 hours of battery life, access to Siri and easy setup, you can start listening to your favorite tunes or podcasts today.

Adidas Ultraboost 21 Running Shoes

Regular Price: $129.98

Sale Price: $89.98

The Adidas Women’s Ultraboost 21 running shoe is perfect for anyone who likes a short run, maybe a 5K, half marathon or more. Coming in several colors and styles, you can slip these shoes on, enjoy the cushioned outsole, sink into the supple insole and secure laces.

Ninja AF101 Air Fryer

Regular Price: $129.99

Sale Price: $97.83

The Ninja AF101 Air Fryer allows you to crisp, roast, reheat and even dehydrate food products faster and cheaper than ever before. It has a 4-quart capacity and offers a wide temperature range along with several time settings so that you can customize each dish to your needs. Plus, all the parts are dishwasher safe.

Beats Solo3 Wireless On-Ear Headphones

Regular Price: $199.95

Sale Price: $99

Beats by Dr. Dre are among the best headphones on the market, and the Solo3 Wireless On-Ear Headphones include the Apple W1 chip, Class 1 Bluetooth and 40 hours of battery time. These headphones even have a built-in microphone and offer an adjustable fit so that you can be comfortable whether you’re listening to an Android or iOS device.

Hoover Power Scrub Deluxe Carpet Cleaner

Regular Price: $198.98

Sale Price: $175.98

The Hoover Power Scrub Deluxe Carpet Cleaner allows you to keep your home spotless and clean up after your pets. The cleaner comes with the Hoover Paws and Claws Deep shampoo and a storage mat to keep the floor dry once it’s put away.

LG CordZero Auto Empty Cordless Stick Vacuum

Regular Price: $999.00

Sale Price: $851.71

The LG CordZero Auto Empty Cordless Stick Vacuum and Wet Mop All in One Tower is designed to work in homes with several pets or children and clean up all the messes that life brings. The battery lasts up to 2 hours, and there’s an extra removable battery that gives you even more cleaning time and power.

Breville Fresh and Furious Blender

Regular Price: $278.60

Sale Price: $199.95

Breville, a top name in blenders and juicers, offers the Fresh and Furious Blender, featuring 50-ounce capacity, Vac Q technology, pre-programmed cycles, LCD display and lid with pull ring. With the Fresh and Furious Blender, you can make everything from a smoothie to a soup and everything in between.

Hot Tools Professional 2000 Turbo Ionic Hair Dryer

Regular Price: $89.99

Sale Price: $55.63

The Hot Tools Professional 2000 Turbo Ionic Hair Dryer is designed for professional use, but it works perfectly in the home. With 1875 watts of power, 6 heat and speed settings and a lightweight design, you can easily style your hair and utilize the diffuser, cut back on the frizz and stretch the 8 ft cord for maximum functionality.

Columbia Heavenly Long Hooded Jacket

Regular Price: $160

Sale Price: $97.38

The Heavenly Long Hooded Jacket from Columbia is designed to be light for everyday use, but it’s heavy enough to protect you from the cold. The plush fleece lining, security pocket, water resistant fabric, 2-way zipper, and zippered hand pockets make the jacket both protective and functional.

ConAir InfinitiPro Hair Dryer

Regular Price: $49.99

Sale Price: $29.99

ConAir is one of the biggest names in hair and beauty, and the InfinitPro is an 1875 watt hair dryer designed for professionals with ceramic technology. The dryer comes with a diffuser and concentrator, and it allows you to blow out your hair just the way they would at the salon.

Deals the Experts Are Hoping For

Experts believe that Amazon’s Black Friday sale could linger for quite some time. It all started with the Prime Early Access sale on October 11 and 12. Previously, Amazon has offered the “Epic Deals” sale that ran through late October. 

This is to say that any sale could come up at any time. 

Even so, those monitoring Amazon are looking forward to a few potential deals, including:

  • Apple Watch
  • AirPods (any generation)
  • MacBook Pro
  • Large, underpriced TVs
  • Amazon Echo
  • More small home appliances (Dyson or Shark vacuums, Instant Pots, etc.) 

While these predictions are based on last year’s Amazon Black Friday Sale, it’s important to remember that most Black Friday sales are fairly consistent and push the products that are most likely to sell.

 

Featured image sourced from Shutterstock

Posted In: Partner ContentGeneral