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Enterprise Fleet recap: Will AB5 take root in California?

This fireside chat recap is from the FreightWaves Enterprise Fleet Summit. 

FIRESIDE CHAT TOPIC: Waiting for the word from SCOTUS: Will AB5 take root in California?  

DETAILS: California’s trucking sector awaits word from the U.S. Supreme Court on whether AB5, the stringent independent contractor law, will be implemented in the state or kept on the sidelines. 

SPEAKER: Greg Feary is a partner at the trucking-focused law firm of Scopelitis, Garvin, Light, Hanson & Feary.

BIO: Feary is president of the Scopelitis law firm as well as a partner. From the firm’s home base in Indianapolis, Feary focuses on independent contractor issues and legislation as well as transportation insurance and corporate structure designs to reduce exposure to the firm’s transportation clientele. 

KEY QUOTES FROM FEARY:  

On how a trucking company in California could meet the B prong of the ABC test under AB5: “You’re going to have to convince a judge that your trade, occupation or profession is different than who you are dealing with, who is hauling the goods and delivering them.”

On independent owner-operators becoming employees if AB5 is implemented in California trucking: “How do you think that is going to happen if they have selected being independent contractors? They bought their own truck. They had opportunities to be employee drivers.”

On the possible model in which a carrier becomes solely a broker: “I think the brokerage model would be somebody deciding that their entire operations in California would be only as a property broker tendering freight to motor carriers for delivery.”

“I have clients saying, ‘It’s not worth operating in California anymore. The revenue we get is not worth the liabilities.’”