Damon Ott, shareholder at employment law firm Littler, worked with carriers to prepare for California’s AB5 labor law before its initial planned implementation in January 2020. But as the law ground to a halt during a legal battle over the past two years, many continued to contract independent owner-operators in leaseback arrangements.
With the Supreme Court’s rejection of the trucking industry challenge to AB5 in June and the subsequent lifting of an injunction on the law, enforcement is poised to begin with the requirement that trucking fleets directly employ drivers. More fleets are opting to take the plunge and change their operations rather than face potential legal exposure, Ott said.
“The overall restrictions that are involved in a leaseback arrangement make it very difficult for a company to demonstrate that all of the factors of the business-to-business exception are satisfied,” Ott said. “Companies really need to know that the risk is very high.”
Transport Dive caught up with Ott by phone for an employment attorney’s perspective on what companies should be doing to ready their fleets for AB5’s enforcement.
Editor’s note: This interview has been edited for clarity and brevity.
Damon Ott: First of all, the easy one: You can hire employee drivers with your own fleet. That's an obvious one, and that's the direction that the California legislature certainly wants companies...
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