The U.S. Supreme Court rejected an appeal Monday by trucking companies seeking to exempt tens of thousands of truckers from California labor law, a potential first step — though not the final step — toward classifying them as employees rather than independent contractors.
At issue is whether drivers who own their trucks, and contract with companies to carry cargo, are employees with the right to minimum wages, overtime pay and other benefits under state law, or independent contractors whose rights are limited by their contracts. Voter approval last November of Proposition 22, sponsored by ride-hailing companies Uber and Lyft, allowed those companies to classify their drivers as contractors, but did not apply to the truckers.
The Supreme Court, without comment, denied review Monday of trucking companies’ appeal of a November 2020 ruling by a California appellate court that said state law, not federal law, determines the employment status of about 70,000 truck owner-operators. Under California law, workers in the same business as the company that hired them are considered employees rather than contractors.
The court’s refusal to take up the case provided a possible window into how the high court might view ongoing battles in the hotly debated field of worker classification.
The companies argued that the state law was overridden by a federal law prohibiting states from regulating operations “related to the price, route or service of any motor carrier” that transports property. But the Second District Court of Appeal in Los Angeles said California’s regulation of truckers’ status has little relationship to, or impact on, the companies’ prices, routes or service.
Quoting a 2014 state Supreme Court ruling in another trucking case, the appeals court in Los Angeles said there was no evidence that Congress, in the 1994 federal law cited by the truck companies, “intended to preempt states’ ability … to enforce labor and wage standards.”
The appellate ruling is now final but has no direct impact, because a federal judge in San Diego, in a similar suit by trucking companies, reached the opposite conclusion in a January 2020 decision. That decision barred the state from enforcing its law against the trucking companies. The Ninth U.S. Circuit Court of Appeals overturned the judge’s decision this April but allowed it to remain in effect while the companies appealed to the Supreme Court, an appeal that is still pending.
Stacey Leyton, a San Francisco attorney representing the Teamsters Union in the federal case, said the California law can still be enforced by private parties and non-state officials — like Los Angeles City Attorney Mike Feuer, whose office argued the case before the state appellate court.
After Monday’s high-court rejection of the companies’ appeal in the state case, Leyton said, “our expectation is that the Supreme Court will deny certiorari,” or review, in the federal case as well.
Joshua Lipshutz, a lawyer for the trucking companies, declined to comment. In a filing with the Supreme Court, he argued that the 1994 federal law “was enacted to prevent states from undermining federal deregulation of the trucking industry with regulations of their own,” like California’s.
The case is Cal Cartage Transportation Express vs. California, 20-1453.
Bob Egelko is a San Francisco Chronicle staff writer. Email: begelko@sfchronicle.com Twitter: @BobEgelko
